As Nations Race To Weaken Currencies, ZIRP Creates More ‘Money’

The final collapse of the international free trade floating fiat currency game is not here just yet but looming on the horizon.  The entire premise of this system is, all nations should be allowed to import into the country with the strongest currency regime!  This usually was the US markets which has soaked up around $4-5 trillion in trade red ink, fueling a global hot trade market game.  But the US is now going slowly bankrupt and to keep this regime running one way only requires all other nations to constantly weaken their own currencies vis a vis the US dollar.  This is increasingly impossible as the US dollar is losing great value every day as it collapses due primarily to the creation of far too much ZIRP credit.  The desire for infinite debt money creation versus the power of zero embedded in the concept of ZIRP money lending is coming to a breaking point pretty fast.


Seeing this happen is most interesting except in the long run, this can cause WWIII just like other trade/labor inequality conditions created previous wars between great empires with unbalanced trade.  The recent hysteria in DC over how to fund our government without raising any taxes or collecting any tariffs or fees from foreign trade organizations illustrates a bankruptcy of mind and purpose.  Nothing that is broken has been fixed.  The solution to the floating currency free trade regime that is bankrupting our government and destroying our industrial base has not been examined.  Instead, the ancient solution of cutting off major portions of the existence of peasants has been offered to us as the only solution to the problems caused by free trade and a floating dollar that stays afloat mainly by foreigners holding vast seas of dollars in FOREX and credit accounts: this artificial system run by aliens who do not mean well at all is a problem for us, a serious problem.


That is, we must depend on billions of people who depend on their own leaders to protect THEM, to protect US!   This is, of course, insane, impossible and above all, stupid.  The dynamics of the present system allows us, for the nonce, to continue grinding out trade dollars and then ship this overseas and hope it doesn’t come boomerang back as higher inflation.  Only, it has boomeranged, big time.  Inflation for the middle and lower classes has been intolerable lately and thanks to the artifice of the ZIRP program run dishonestly by the Federal Reserve and Federal Government playing tricks with inflation statistics, we have the ILLUSION of no inflation while inflation rages.


This, in turn, is hammering the rest of the world which has to soak up more and more US dollars to keep the free trade machine rolling forwards.  Here is an older, interesting article about the nature of the Goddess of Infinity from the NYT:


STEVEN STROGATZ – Opinionator –


Her six-year-old son Ben had asked her a math question she couldn’t answer, and she was hoping I could help:

Today is the 100th day of school. He was very excited and told me everything he knows about the number 100, including that 100 was an even number. He then told me that 101 was an odd number and 1 million was an even number, etc. He then paused and asked: “Is infinity even or odd?”

I explained that infinity is neither even nor odd. It’s not a number in the usual sense, and it doesn’t obey the rules of arithmetic.


HAHAHA.  Even and odd are concepts very much based in the yin/yang business.  There is darkness and light.  Good and evil.  Heavy as lead and light as a feather.  Long, long ago, the concept of Libra weighing all things on celestial scales came into being.  The most bizarre part of being hit by lighting, as far as I am concerned, was how I suddenly understood that big and little are the same, a heavy stone can be light as a feather, eternity is a flash of lightning…all at the same time.  So, I was bemused to learn (my father was very much a part of the US rocket program since before WWII) that if I were to leave the earth, a stone weighs as much as a feather.


Infinity is NOT a number.  Or a group of numbers.  It is a CONCEPT.  That is, it doesn’t exist except theoretically.  There is always a limit to how infinite any system is…that is, pure numbers attached to nothingness could go to infinity if we waited forever for the numbers to finish which they cannot do ipso facto.  A concept connected to this is, infinity is quicker in time than a split second.  That is, since there is no time within eternity then it is so brief, it is the same length as the Big Bang: over instantly and replaced with elements that age and which have definite limits and then time and space expands with the movements of the elements created by the collapse of infinity and eternity.


This sounds insane but infinity is insanity.  It is not rational.  It is an emotional state.  Bored children told to wait for something think this wait is infinity.  Dr. Faustus, when dying, was so smitten by his own works, he asked for the last minute of his life to go on forever and thus, was caught by Mephistopheles in a trap of his own making.  The entire US system is caught in a trap made by the very rich and quite powerful.  They want to have an infinite system whereby more and more money is created out of thin air, they could then spend this here and abroad, buying whatever they want, and in turn, they get to skip out on taxes and provide few or no services but rather, indulge in expressions of infinite greed whereby they continue this on and on, forever.


That is, this is impossible.  The desire to do this for more than the most limited time is what is driving us all off a cliff.  Everyone wishes to go to infinity here because it is so easy to do within the free trade floating currency system which as NO restraining system at work aside from only one: the planet earth has limited resources and limited space.  One can’t fill it with goodies for one’s self.  We see this in the TV show, Hoarders.  Mostly, these are middle class or poor people who have wasted the little money they had, piling up massive amounts of physical things of various sorts in these living crypts where everything rots and the buildings become totally uninhabitable, the families are destroyed as others flee the crushing hoard’s weight and filth.


The desire to have in infinite amount of anything including Freudian levels of organic waste from the intestines is so overpowering, anyone trying to stop the hoarder from doing this is attacked with total resistance and even outright violence.  So, just as Freud correctly saw money as poop, so it is with the very rich: they cannot part with any of it for fear they would lose the infinity game.  The winner of this game will be the richest man or woman on earth, a total hoarder and pig who sucks up all the wealth and occupies all the spare space with all the other humans relegated to small corners or driven out or killed.


This mental health problem is a problem between nations: the US has been hoarding tons and tons of consumer goods and we are drowning in this trash while we threw away our domestic support systems, our currency, our jobs, our government: everything is rotting away and eventually our collective home, filled to the gills with foreign junk, will become uninhabitable and we will be evicted.


Since the entire earth depends on shipping junk to the US for us to hoard, when we can’t do this anymore due to our economic condition deteriorating, we then see world Stocks Tumble as Signs Point to Weak Global Economy.   Since all economies depend on the US sucking down whatever tripe is sent here (remember the flood of stuffed teddy bears a few years ago???) we see all the major central banks struggling to run ZIRP systems in the teeth of high inflation in order to weaken their own currencies and to thus gain trade advantage with each other seeking to feed the US hoarders:  Bank of England holds interest rates again 


Mortgage holders and business organisations breathed a sigh of relief as the Bank of England held interest rates for the 29th month in a row on Thursday, amid a worsening economic outlook.

As expected the Bank’s monetary policy committee (MPC) kept its base rate at 0.5% on Thursday, the lowest on record, and made no changes to its quantitative easing programme.

Inflation eased to 4.2% in June and even though rising utility bills could push it back above 5% soon, analysts believe any pick-up will be temporary…The UK economy barely grew between April and June following six months of stagnation. Manufacturing is back in the doldrums…


So, inflation for consumers in Britain is 5% so the central bank lends to other bankers at near zero percent.  Right!  And this does what?  Creates nearly free credit for the bankers to sell at 5% or more.  In turn, savers are hammered as they earn 0% interest on savings, forcing them to spend their money instead.  Well, this increases inflation as more money chases after goods within Britain.  No one saves any money and instead, put it into say, GOLD.  Gold has shot to record highs.  Which doesn’t surprise me at all: the Tea Party is also the Gold Party and would happily create chaos that would make private gold holdings more valuable.


Not that everyone else isn’t working to do this, too! The very rich who have tons of money to play with, they get the ZIRP loans, after all…they have been heavy gold buyers and are also happy the US government is in trouble thanks to anti-tax cut Republicans. This is a two for one deal: they get the tax cuts and then use the money from tax cuts to bid up the price of gold.


As usual the first nation to go into ZIRP central lending and infinite government debt is working hard  to make ‘all-out’ efforts to fight surging yen: Noda


Noda, appearing before a Diet committee, reiterated that the yen has been “one-sidedly overvalued,” and that he doubts the current strength of the Japanese currency properly reflects the nation’s economic fundamentals.

“It is not only about intervention. But as a country, (Japan) must be determined and make all-out efforts to prevent the yen’s surge with a package of various policies,” the minister told both ruling and opposition lawmakers at a session of the Financial Affairs Committee of the House of Representatives.

BOJ Governor Masaaki Shirakawa, who attended the committee session, said the bank will judge whether it needs additional policy easing by checking economic conditions.

While warning that the current level of strength of the yen could derail Japan’s stable recovery from the March earthquake and tsunami, Shirakawa said the bank’s Policy Board will “respond appropriately.”


I remember years and years of the US and Japan accusing China of manipulating the currency.  I thought this was very funny back then.  Everyone in the false world of floating fiat currencies are always ‘manipulating’ them!  The US had to desperately negotiate with Germany and Japan with the Bretton Woods deals to ‘fix’ rates that were ‘fair’, ie: would allow the US to export to both losers of WWII.  This DID NOT WORK AT ALL.


Of course, Japan discovered that holding US dollars in an inert FOREX fund did the trick!  Since then, all other nations wishing to manipulate the dollar to make it artificially strong do the exact same thing. It is now universal meaning, it can’t work so hot anymore since the Big Players must save more and more.  Once China surpassed Japan in its FOREX holding dollars, Japan’s ability to manipulate the dollar vanished.  Japan just can’t compete in this game with China. China won.  Hands down.  Big time.  And 15 years ahead of schedule of the 50 Year Plan, too!


Nonetheless, Japan has decided to double down: making government debt not just 200% of GDP, now it will be 400% of GDP if this is necessary to restart the export machine run by Toyota and gang.  So, Japan drives down yen as FTSE falls again.


Japan has followed in Switzerland’s footsteps and intervened to stem the strength of its currency, which has been boosted by investors seeking safe-haven investments...The Bank of Japan sold more than one trillion yen (£7.7bn) during trading on Thursday, according to latest estimates, in an effort to drive down its value. It also eased monetary policy by expanding its asset purchasing scheme and offering more cheap loans to financial firms to encourage them to keep lending.

Finance minister Yoshihiko Noda said Japan had consulted its international partners but acted on its own…Spain and Italy are at risk of a “market ambush”, Citi’s chief economist Willem Buiter noted on Wednesday, with their 10-year bond yields spiking to 6.46% and 6.26% earlier this week. “Belgium, too, is now suffering from contagion from the periphery and even France appears to be decoupling from core Europe.”


This is all so futile so long as China can triple down these double down deals.  For the REAL race is to see who has the biggest FOREX holdings on earth: this is the new Creditor Nation and so far, it is China…very much alone now, I doubt any nation can catch China in this race.  Not even close.  The more the US dollars are produced, the more China can hold versus what the EU and Japan can hold.  The key here is easy to see: China’s own national debt is NOT ZIRP at all!  China’s government acknowledges there is real inflation and has taken traditional steps about this: increase bank holding ratios and interest rates.  Japan and the EU and above all, the US are doing the EXACT OPPOSITE!


Remember: zero and inflation are mirror images of each other.  ALL nations cannot go ZIRP at the same time.  So some have to go in the opposite direction to balance things.  Bit by painful bit, all of Europe is falling into the ‘charge high interest rate’ regime while the US, UK and Japan double down on the ‘zero interest free loans to banks and investors and governments’ regime that is causing all three to go deeper and deeper into debt.  So, who will Europe join in the bitter end?  The three ‘free money at no interest’ countries or the main dealer in this game who charges itself real interest rates and controls the production of credit and thus, keeps from creating too much debt?


That is, CHINA.  Eventually, the EU will be forced to realize that they are on China’s side of the game, not the US or Japan.  The day of awakening is not too far off, either.  Berlusconi fails to stem rising panic


The FTSE 100 index closed at its lowest level since November, after its biggest one day fall for nine months of 133 points. After a nerve-racking day Wall Street narrowly avoided its ninth consecutive day of falls – a losing streak unseen since 1978…Investors bet on gold as a safe haven driving prices to a record $1,663.40 an ounce.


As Congress fiddled and as many Muslims lands burn with US hell fires, we see stocks collapsing in the West.  Well, no shock here! Who created this monster Congress, anyway?  Who owns it?  Who pays our Congress people to vote against our interests?  The same people who are panicking in Wall Street, that is who!  Zero sympathy for them.  They run off to gold forgetting that gold is also pretty worthless if mobs of furious victims of economic stress are out hunting with bullets and guns.  Look at Mexico to see how the unemployed can end up working in the narcotic drug running business.

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Filed under .money matters, Free Trade, Politics

9 responses to “As Nations Race To Weaken Currencies, ZIRP Creates More ‘Money’

  1. payAttention

    I heard a recording of Woody Allen from 1969 where he wants to congratulate NASA on the lunar landing but apologizes for not being able to speak German. Even clowns know what happened, so please stop bragging.


    ELAINE: Und mein Vater sprach deutsch. Was sagst du? Hola!

    And guess a wild guess who cleared Warner and the other Nazis to come here?

  2. I have mentioned this post in my own blog. Thank you Elaine for your wonderful job!

  3. Henry Hub

    I read a lot of blogs on the web. Some are perceptive , some are bland, and some are pure propaganda. I always end up at Culture of Life News to get the true perspective on things. Keep up the good work Elaine!

  4. Hardrock


    You certainly hit the nerve center on the ZIRP fiasco. Yes, we will be facing off against China, Germany and Russia in the not too distant future…only it will be a shooting war rather than the machinations of financial chicanery which will will lose and then start WWIII.

    Truly sad that we’ve allowed ‘aliens’ to corrupt our political and financial system along with education. This means the mass populace aren’t smart enough to tell the difference between the truth and a lie and worse….don’t care as their time is filled up with ‘media’ of some sort or another.

    These same ‘aliens’ in league with our Anglo elites have created circumstances that put us at odds with most of the world and they’ve done this for a couple of simple reasons…… HUBRIS & HATE. The world will pay a terrible price for what we’ve allowed….we will pay even more dearly….unless, people wake the hell up and listen to people like you.

    Hope your hubby is feeling better.

  5. melponeme_k

    Yes, this disaster is infinity/Zero/death, a financial black hole.

    It boggles my mind to think about how infinity turns into zero, that they are actually like those double sided dolls I loved as a child. The one I had was Little Red Riding Hood on one end and the other was the Wolf.

    Why do some see this and others don’t? I think it relates to trauma to see this reality, either mental or physical. It is the trauma that opens the mind.

  6. floridasandy

    how is this the tea party’s fault?

    you write a good column and then throw in this mindless name calling right in the middle of it.

    who created the ZIRP? the federal reserve, under the direction of our own government.

    who is flooding the world with dollars? the federal reserve, not the tea party.

    who is causing inflation, the federal reserve, not the tea party.

    the federal reserve is the INTERNATIONAL banking cartel you should be focusing on, but strangely you go after the tea party instead.

    i don’t wonder why.

  7. Infinity is impossible to think about, so its convienient to create boundaries , thinking of the universe as a closed system. But boundaries by defintion create something beyond. Infinity runs the other way to, no mattter how small you get you can always imagine smaller. The universe is a real thing created out of the tension between two possibliites?

  8. Joseppi

    Like the intransigent paradox of zero and infinity – How Elaine keeps repeating the same themes day after day, and yet she daily writes captivating, thought provoking analysis – Well, she just baffles me no end.

  9. “The most bizarre part of being hit by lighting, as far as I am concerned, was how I suddenly understood that big and little are the same, a heavy stone can be light as a feather, eternity is a flash of lightning…all at the same time.”

    That’s a very Zen insight. Looks like you didn’t need a koan, such as “what is the sound of one hand clapping,” to figure that out. You just needed to be struck by lightning. I’d rather have the koan, as I think you paid a very high price to see the truth.

    “And guess a wild guess who cleared Warner and the other Nazis to come here?”

    Your dad. What do I win, an evening watching anime with you?

    I’m surprised I’ve beaten you to blogging about S&P’s downgrade of the U.S. credit rating

    Now S&P thinks it’s a Satan Sandwich

    I blame the people who are serving the rich, such as Grover Norquist, who has been abetting the lowering of the tax rate to “starve the beast” and make government so small that it can be drowned in a bath tub.

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