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The Push for a Global Socialist Economy

By: Steve Johnson

11/21/2008 - 13 Comments

The economy crisis has created a window of opportunity to world leaders to come together and make a push for a global socialist economy. 

The America system of capitalism may have seen its best days.  While the Wall Street brain trust is busy telling everyone, ‘don’t worry, the market will come back’ and their best line of all ‘buy and hold’, I’m afraid they just don’t realize that this is not just another short-term recession – but a global financial meltdown that has been building for 35 years.  

Nathan Lewis author of Gold: the Once and Future Money, wrote an excellent article today explaining the 1944 Bretton Woods monetary system, where the world leaders gathered in New Hampshire to decide on a system based on gold.  Here is part of the article.

In the Bretton Woods system, the dollar was pegged to gold at $35/oz., and other currencies were pegged to the dollar. Currencies didn't float in those days. Floating, manipulated currencies were considered an abomination. Exchange rates remained fixed. This stable, gold-linked system formed the foundation for a wonderful worldwide expansion of wealth in the 1950s and 1960s - even among the war's losers, Germany and Japan.

Unfortunately, there was a flaw in this plan. Interest rate manipulation, as practiced by the Fed, was surging in popularity. The result was that the fixed exchange rates and gold link came under constant pressure.
Eventually, the conflict between manipulative central banks and the gold link became overwhelming. In January 1970, Richard Nixon installed his friend Arthur Burns as Chairman of the Federal Reserve. 

In August 1971, the conflict between Burns' manipulation and the gold link became too great, and, rather than abandoning Burns' currency games, it was decided to abandon the gold link instead. The dollar had become a floating currency. By 1973, all the major currencies floated.

An economic catastrophe ensued, the inflation of the 1970s. Even in the 1980s and 1990s, as currencies were stabilized somewhat, economies never regained the health they showed in the 1950s and 1960s

The environment of monetary chaos that we have lived in for the past thirty-seven years has finally produced a political willingness to fix the problem.

Bretton Woods was, overall, a great success. The only reason that governments decided to abandon the gold link was that they preferred to play central bank games with their currencies. A New Bretton Woods must wholly and completely abandon such practices.

To address the current financial crisis, world leaders are once again meeting to discuss how the world can restructure the global monetary system.

A few weeks ago, I wrote about the criteria that will be needed to impliment a new global monetary authority in this article.  Calls For New Global Monetary Authority

Cliff Kincaid, wrote a very fitting article today addressing how the Bush and Obama administrations are responding. Here is part of the article.

Bush’s November 15 “international summit,” including the United Nations Secretary-General, was to “begin developing principles of reform for regulatory bodies and institutions related to our financial sectors.” This is bureaucratic doublespeak for what has been called “global governance.” Some may fear with good reason that world government and global taxes are on the way in and U.S. sovereignty is on the way out.

While Bush insists that the nations at this summit must “recommit to the fundamentals of long-term economic growth-free markets, free enterprise, and free trade,” he has already authorized several socialist-style schemes, including the $700-billion bailout, nationalization of mortgage companies, massive subsidies to American International Group (AIG), and the federal government taking ownership stakes in big banks. The estimated cost is already $1.8 trillion—more than $17,000 per American household.

Calling the global financial crisis an “historic opportunity,” a coalition of “progressive” individuals, social movements and non-governmental organizations met in Beijing on “October 15 and issued a statement urging the “radical economic transformation” of the global economy. They advocate a “global taxation system,” including what are known as “Tobin taxes, on the movements of speculative capital,” and “stringent progressive carbon taxes on those [nations] with the biggest carbon footprints.”

Their plan also includes phasing out the U.S. dollar as the international reserve currency and establishing “a people’s inquiry into the mechanisms necessary for a just international monetary system.” Clearly, they intend to bring the U.S. into a system of international socialism, with new and more powerful global agencies deciding our economic and financial fate. “

At the Clinton Global Initiative meeting in September, Obama reaffirmed his own “embracing” of the MDGs and noted, “This will take more resources from the United States, and as President I will increase our foreign assistance to provide them.” On top of that, Obama supports the Jubilee Act, which would cancel as much as $75 billion of third world debt. That adds up to $920 billion more in taxpayer money on top of the estimated $1.8 trillion in national and domestic spending to deal with the current crisis.

We may be facing the bankruptcy of the United States, even without all of this new spending. Indeed, the Global Europe Anticipation Bulletin, which predicted the current crisis, reports the likelihood that the U.S. will default on some of its debts next year.

It declares that “…our researchers anticipate that, before next summer 2009, the US government will default and be prevented to pay back its creditors (holders of US Treasury Bonds, of Fannie Mae and Freddie Mac shares, etc.). Of course such a bankruptcy will provoke some very negative outcome for all USD- [dollar] denominated asset holders. According to our team, the period that will then begin should be conducive to the setting up of a ‘new Dollar’ to remedy the problem of default and of induced massive capital drain from the US.”

The only chance that world government leaders have to stop the global recession turning into a global depression is the stop central banks from increasing their currency, and the only way to do that is to link the world dominent currencies to gold.  This is likely to cause the demand for gold to drastically increase and perhaps bring new government controls to the ownership of gold.  The price of gold is likely to continue to increase as more and more of these meetings discuss linking gold to currency. 

The world is headed towards a global currency with a global central bank followed by a global government. The only problem is that 'capitalism' is not part of the plan. 

Foreign world leaders are using this opportunity to create a global socialistic economy, which is exactly what WWII was fought over.  A global socialistic economy will once and for all enslave mankind.  Many of the world governments are very corrupt and their corruption will be empowered as America and the dollar weaken.

Despite this, the economy is likely to remain in recession for at least a decade. Gold standard or not, they will not be able to stop the financial damage that has been building for 35 years. I find myself torn as I wish for my gold investments to prosper, I also see the future of America declining and the rise of a corrupt global government.

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Gold: The Once and Future Money

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