Those who were waiting for drama yesterday were probably disappointed. Those of us who were looking for clues to significant events that could cause a couple of months worth of falling dominoes, less so. In terms of news reports, what jumped out at me yesterday was a ratcheting up of concern about Ireland's economy which appears to be imploding. It feels an awful lot like what happened in Iceland but with more of that pulling of a thread that starts to unravel a much larger tapestry kind of urgency. So I'd keep an eye on what happens there. Maybe it's because I still feel that the economic component to the tipping point is primary. But that's just me. I can't speak for Time Monks Clif High or George Ure. They speak well enough for themselves. Ure has posted his take on what events fall under the umbrella here:
Did the ‘tipping point’ begin on Sunday morning? Yes. Not only did we have lots of release language surrounding the release of Aung San Suu Kyi of Burma/Myanmar, but there was the release of Paul & Rachel Chandler who had been held by Somali pirates for 388 days.
Then – almost exactly on schedule – time-wise – we’ve had a big outburst of earthquakes in the area south of Yemen and northeast of Djibouti. And no, we’re not talking 2′s and 3′s. This is an area which hasn’t been seismically active and in the past 30-hours it has suddenly popped off – not with one or two - but with 40 quakes on the USGS site.
Meantime, in Indonesia, the Child of Krakatau (Krakatoa) has been active every five minutes.
Ure goes on with a laundry list of natural disasters and economic gasps, including Ireland's collapse and the larger international economic factors that are swirling around it. Taken as a whole, it actually is rather dramatic. Ure also touches on the failure of the recent G20 to produce substantial agreements on key issues. Among the more concerning things I've been watching over the past week, as we were holding our collective breath, is the possible move away from the dollar as the international reserve currency.
At the center of the crisis is the vast decline in the global economic position of the United States, which has shattered the foundation for the restabilization and expansion of capitalism that followed the Depression and World War II. This is reflected starkly in collapsing confidence in the dollar and the currency system anchored by the US currency.
On Monday, World Bank President Robert Zoellick stunned governments and central bankers by proposing that the G20 consider a radical revamping of the world currency system. He suggested that the role of the dollar as the supreme reserve and trading currency be ended and that it be supplanted by a new system involving the dollar, the euro, the yen and the Chinese renminbi. He further proposed that the new structure use gold as an indicator of currency values.
This was a tacit acknowledgement that the system that has prevailed for the past 65 years is no longer viable and that there is no national currency that can replace the dollar as a world reserve currency.
The near-zero interest rate policy of the US Federal Reserve has flooded financial markets with cheap dollars, resulting in a staggering decline in the value of the dollar on world currency markets. The dollar has fallen by 13 percent against the Japanese yen so far this year. Just since last June, it has dropped 18 percent versus the euro. Weighed against a basket of currencies, the dollar is down 8 percent since late August.
In other words, much as predicted in several webbot reports, the dollar is continuing to die. A bit more detail on this and on China's move's against US currency can be found here.
The Fed's controversial decision to take on a second round of "quantitative easing" sent Obama to the G20 with a very weak hand, with critics here and abroad voicing concern over what looks to be completely reckless fiscal policy. So any hope of the G20 shoring up our position pretty much evaporated last week. Neither the US nor the rest of the global economy gained much stability to absorb fresh shocks like the one coming out of Ireland.
Mostly, I think what we're dealing with right now is a shattering of illusions, including illusory systems like the global economy. Or, more specifically, an acceleration in that collective disillusionment. It also seems like the erosion of edifices is escalating. The junta in Myanmar -- or what many of us still prefer to call Burma -- is one. Troublesome truths seem to be slipping out all over the place, from Bush's cavalier acknowledgment that he personally authorized torture, to the revelation that the CIA gave Nazi war criminals safe harbor, to the WM3 finally being granted an appeal after 17 years of denials. Perhaps that's what the release language period will be comprised of; one secret after another coming to light as the overarching structures lose their grip on the levers of power.
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