At a time when the Western world is poised at the edge of disaster
and should be trying to heal its broken currency system, we wake up
this morning to find that the stress of it all is causing at least
four bitter quarrels within and between the major nations (and maybe
a fifth one that's still being kept under wraps):
1. German Finance Minister Schauble is telling US Treasury Secretary
Geithner to mend America's own economic problems before interfering
with Eurozone's.
2. Chancellor Merkel's Coalition government in Germany faces defeat.
Several of her own party are threatening to resign over the matter of
the proposed Euro backstop fund.
3. President Sarkozy has lost his majority in the French Senate and
thus his hitherto credibility in speaking for France or the Eurozone.
4. In Italy, Prime Minister Berlusconi and his Finance Minister
Tremonti are at dagger-point as to what austerity measures should be
adopted -- and, indeed, which of them should keep his job.
And what is the fifth one?
5. It is being rumoured in blogland that, in America, President Obama
has so little grasp of America's economic situation that the country
is really being led by Treasury Secretary Geithner and the Fed
Chairman Bernanke (both, of course, unelected).
So what will happen if and when the Crash comes? My guess is that,
initially, the politicians will make themselves scarce. The only
example that comes to my mind is the chaos that occurred in 1972 when
the oil monopoly countries (OPEC) suddenly reduced supplies and
simultaneously raised the price four times. In England there was an
immediate need for drastic petrol and diesel rationing. This was when
our civil service should have moved smoothly into action. But it
didn't. It didn't have the knowledge of how our fuel system actually
operated. What happened was that the top people at British Petroleum
invited the top people from the other three or four major oil
corporations to their penthouse offices, together with top government
officials as note-takers. Between them, the majors organized an
emergency system and the civil servants then hurried away to carry
out their end of it.
If the present dollar-euro predicament turns into a major Crash --
as many knowledgeable spokespeople (including big investors) are
forecasting -- which would inevitably involve China and much of the
rest of the world, it will be devastating to billions of people
within days or weeks as supply lines start to seize up. What will
happen in my view is that the major transnational corporations,
ranging from food production and supply through to energy through to
communications will hasten to assume command of an emergency
procedure. Maybe a score or so of the very largest would be involved
in a first phase whereby they'd divide into crucial economic sectors
and then other smaller corporations would be invited in as infills,
and then supplier businesses and so on. By this time I'm assuming
that the existing national currency systems within and between
governments would be in great danger of breaking down. To keep at
least a rudimentary economic system going initially and prevent their
customers actually starving, the corporations would have to devise a
brand new rationing system -- namely money -- for use between
themselves. Otherwise, national currencies would be so haywire that
they couldn't operate. And then, of course, the corporation would
have to extend it to their billions of vital customers. (And, of
course, some of them own the biggest printing presses in the world,
so this would be no problem.)
By this time, the various national civil services (with politicians
trailing behind them when it become safe) would start to integrate
with the corporations' procedures just as mentioned above during the
'72 Oil Crisis. Some might think that the corporations would want to
exclude them in order to increase their economic power as normality
returned. But that's paranoiac. Why should they? This would entail an
entirely different ball game of infinitely greater stress and
complexity than their own operations. Besides they, quite as much as
the least individual in any civilization, still need an objective
system of laws and justice and they need secular governments for this.
But if, in fact, transnational corporations had managed to devise an
emergency money system, then they are going to leave one residue
behind them. The emergency system is going to have to persist for a
long time to come for at least months, if not years, even if, for
reasons of amour propre, civil servants and politicians begin
reviving their own currencies in parallel in order to get their own
systems into gear again and to raise taxes. A rate of exchange would
arise between each of the 200-odd national currencies and the
emergency world currency. America, presumably still viable (after
all, it has numerous shale gas basins!), would have to give up its
pretensions of the dollar remaining as the predominant world reserve
currency. It (and the newly split-up European countries) would have
to agree with what China, Russia, India, Brazil and other emergent
countries have been calling for for years. The corporations'
emergency world currency could at least be symbolic, if not exactly a
prototype, of what is needed.
There's hope for us yet. But, as always in human affairs, it takes a
crisis to bring about major change. Thus it might need a world-wide
economic crash to bring about a world-wide currency that can serve as
the stable reference for any other currencies that different cultures
would still like to retain.
Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2011/09/
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