Gear up for the Great Economic Disaster. Before World War I, the American currency was supported by the gold standard, every one dollar note was a receipt for the same amount of gold that could be exchanged in the bank any moment you want.
Then, World War I started on July 28, 1914, and the US Congress passed the Federal Reserve Act of 1913 that allowed the debasement of the US currency. Now, every 50 dollar currency note was backed by 20 dollars worth of gold that was almost 40% of the original value. In 1936, Hitler annexed Czechoslovakia then two years later Austria, and finally, in September 1939, he ordered to conquer Poland that initiated World War II. During the war, America, except minor skirmishes, was not practically into the Great War until the Operation Torch of conquering French Africa in November 1942, eleven months after the Pearl Harbor Attack. During the unbiasedness period, America sold goods and services to European powers and acquired gold in exchange that devastated the global economic balance, and now the gold standard or gold transactions were not viable anymore. At the end of the war, a new monetary system was introduced, which is called the Bretton Wood model.
This model allowed all Fiat currencies of the world except a few to balance against the US dollar currency while US 35 dollar claim bill was balanced by 1-ounce gold, this gave economic confidence and stability and pegged all currencies against US dollar and US dollar against gold and currency exchange rates were fixed that resulted into US economic boom. Then the US started relentless printing of US dollars without any fixed gold ratio, French President Charles de Gaulle sensed it, and he asked America to trade in gold against dollar. He sent dollars to the US and bought back his gold, other countries followed the French model, and within a couple of years, America lost 50% of its gold reserves. Knowing that gold standard could not be maintained and could turn into a global economic disaster, President Nixon in August 1971 was forced to introduce a new economic model that converted all global currencies into fiat currency. Every thirty to forty years, the world had an entirely new monetary system.
There was the classical gold standard before World War, one the Gold Exchange standard between the wars, the Bretton Woods system from World War two to 1971, and the global dollar standard from 1971 until today. The reason there have been so many monetary systems is that they are all man-made and not a product of the free market because they cannot possibly account for all of the forces in the free market, they build up imbalances and pressure develops stress cracks and then implode. The financialization of the US government before 2000, if we had a recession and the stock market fell, tax revenues would just fall a tiny percentage or just go flat. But since the year 2000, federal tax revenues rise and fall with the stock markets. In 2008, the stock market crashed by more than 50%, and federal tax revenues fell by 28%, this means that from now on because of the crushing debt and future obligations the Federal Reserve and the government must come to the rescue of Wall Street every time there is a stock market crash or risk of their demise.
In this video, we compare the build-up to the stock market crash in 1929 and the Great Depression vs now. By helping you to understand the differences and similarities between the two we aim to help you make up your own mind about the question, are we headed for a Great Depression?
Since 1971, every fiat currency is losing its purchase power and value. Remember that in order to levitate the stock markets from the crash of 08, it took a 400% increase in base currency. Each time they do this, their power is diminished, so the next time we suffer a downturn, they aren’t going to get the same economic pop from creating another 3.2 trillion. In the next crash, it will probably take a similar percentage increase or more, but this time instead of starting from a base of 0.8 trillion, we’re starting from a base of four trillion a 400% increase would mean the creation of 16 trillion, which would bring the total monetary base to 20 trillion.
The problem is that according to the Federal Reserve M2 currently stands at 11.8 trillion. It’s now about 15.8 trillion. So the next time the stock market crashes, to save the government, the Federal Reserve may have to create more currency than currently exists, and that is the hyperinflationary end to our economic roller-coaster ride. When a wealth transfer of such scale is perpetrated by the Central Bank, the governments, and the financial sector to enrich themselves, it’s nothing but the legalized theft.
History in the Making.
Throughout history, none of the fiat currency could sustain whether it was Athenian, Roman, Chinese, or Indian, there has been 0% success in this regard. All western currencies, whether it is US dollar, British pound, or Euro of European Union, have been losing their purchase power, the global economic system has already reached on the verge of collapse, and we can anticipate a new global economic system right after the COVID-19 pandemic. So we should be physically and mentally prepared to contribute our share to the new global economic model that should reflect the true democratic values with increased liberty and democracy at our workplaces. And we should think for a while that why this upcoming global economic model cannot be a cooperative model that may work for the wellbeing of the working class, which is the greatest global producer.
This COVID-19 disaster is an opportunity to critically examine and reject the brutal global economy where a few have everything while the rest of the humankind have nothing. We can utilize this quarantine time to innovate some groundbreaking economic model, just like Karl Marx did in the 1840s, but this time we would not foolishly pursue the fancy ideas of communism or socialism because we know that both did not work in the recent past. We aspire to create a cooperative capital global economy that is based on true freedom, justice, and equality at the workplace. What do We Need to do to stop this Economic Carnage? History teaches us that absolute power corrupts absolutely.
That is why the old imperial system failed that was followed by freedom, justice, and equality secured through the American Revolution (1776) and the French Revolution (1789). We need to re-establish our economy, workplace, and social structure on the golden principles of freedom, justice, and equality. In the following passages, we would try to examine how we can renovate and rebuild this world on these principles.
1. Pillars of Justice The architects of the new modern world envisioned building it on the principles of social justice, equality, and democracy, but unfortunately, these core values have not been secured at the workplace yet. American politics is reverberated by the slogans of justice, equality, and liberty, but the American neo-feudal lords and king CEOs have absolute power and resources to control anything they want. They do not allow workers to enjoy these values in their workplace, where they spent most of their lifetime. We need to establish these core humane values at the workplace and secure democratic rights, freedom, and equality for workers at workplaces. Workers should have the liberty to choose their profession, they should be treated with the utmost respect, and their voices should be considered in the policymaking process.
2. Establishing Parallel Public Banking System We don’t need to fear this mighty brutal elite because we have a solution to curtail their influence. We need to introduce a new economic global system that is similar to the World Wide Web, which should not be controlled by one country or one institution. We need to build a network of broad-based public banks that should not be controlled by any company or group.
They should operate on egalitarian principles and should secure the rights of workers. This would require unprecedented political will and courage to fundamentally reform the global economic system. Currently, the stock exchange shareholder financing mechanism and the private banking sector fund the corporations. This mechanism must be replaced by public banks owned by worker cooperatives that should serve the interests of the workers. The current economic system, with its private banking, is serving only the crooks of Wall Street.
3. The Free and Healthy Markets It is believed that capitalism and the free market are controlling the global economy. Capitalism, as we know it, has been gone for decades; it is now a sham, and the reality is we have a controlled market that is monopolized by stock exchange corporations. Small businesses that represent healthy capitalism and a healthy free market are swallowed up by the Wall Street sharks, simply due to the lack of freedom and democracy in the workplace. Workers wouldn’t accept selling their company to the stock exchange if it was subject to their vote.
The only work that can survive the Wall Street parasites is Workers’ Cooperative Corporations since they are funded by public banks rather than private banks. In Spain and Italy, Workers’ Cooperatives built their public banks to serve their workers. It is worth noting that the CEO’s cannot earn higher than seven times the salary of an average worker. Such environments won’t allow the forming of brutal capitalism to exploit humanity and nature. This is possible only if we have justice, freedom, equality, and democracy at our workplaces.
4. True Pulse of Power It’s worth noting that this cooperative structure is not traditional socialism, and certainly, it is not communism. There is not a single company or institution in the communist or the socialist countries that regard freedom and democracy at the workplace. It’s quite the opposite. The communist and socialist regimes have strict laws for workers, and they have developed sophisticated enslaving mechanisms. There is no difference between brutal capitalism and brutal communism.
They secure the interests of the same brutal elite. Until we establish democracy in the workplace, we would not be able to secure economic prosperity for our working class. We highly recommend that you research Dr. Richard Wolff’s Democracy at Work. Dr. Wolff believes in the Workers’ cooperatives principles and free-market economy run by demand and supply. Dr. Wolff’s best example of Workers’ cooperatives is Mondragon, a Spanish multinational workers’ cooperative federation, which was founded in 1956 by Jose Maria Arizmendiarrieta, this unique organization has more than 100,000 workers. Mondragon Corporation is a broad-based worker’s cooperative federation that directly serves its workers who have a prime share in its policymaking and profit. It is one of the most efficient and first of its kind cooperation, which has set new standards for worker’s cooperative economy. It’s the largest and most successful Workers’ cooperative in the world! It’s a great example of Freedom and Democracy in the workplace.
5. Making of Hearty Nations and Healthy Humans If we could achieve freedom, justice, and equality at the workplace, then we can develop a broad cooperative global economic system that would benefit the poor working class, which constitutes the major part of the world population. As everything grows out of the economy, the cooperative economy would lead to a healthy social organization and will reduce the tussle between the haves and have nots. The working class would not be enslaved by the private banks and corporations. They would be masters of their destiny.
6. Breakdown and Transform If we carefully examine the big economies of the world, for example, the US economy, the European Economy, and the Chines economy, they are all failing because they have not established their economic system based on freedom, justice, and equality. The gulf between the rich and the poor in these countries is widening day by day.
They are heading towards an economic catastrophe that sooner or later would shatter these economies. If we want to get rid of the danger of brutal capitalism or neo-feudalism, we must rebuild a fair economic system to form healthy political parties, an unbiased educational system, effective healthcare, and social welfare systems. The damage done by the brutal capitalism would slowly recover. Thus we would have a healthy cooperative economy in place that would secure the rights of the people.
Conclusion I sincerely hope that this message reaches everyone in the world, people should discuss it with their loved ones, their neighbors, their friends, and their teammates at the workplace. I request you to share this message with your counselors, congressmen, governors, and presidents. Keep on reminding yourselves and your loved ones that we are sailing the same boat if the boat sinks then we all sink together. Heroes, who made history, were the few freemen and women who dared to transform and build regardless of popular opinion. Now, the rest just follow them. Thus, since the beginning of history, few people have dared to unite to change the global path to write honorable history.
They have not been afraid of obstacles, opposition, controversies, or death. If a few of us unite and provide the appropriate knowledge, we can be among those a few who will turn the world into a better place to secure future generations. We face an unprecedented threat against humanity. Try to understand the challenge with awareness and high spirit, then contribute positively as much as you can. It is a valuable opportunity to write your chapter of history that is now being made! The clock is ticking, and we don’t have time to waste, do something, and participate now before it is too late!
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