A long time ago, during a time period far far away, the British Pound was the world's reserve currency. Then a nasty war occurred that plunged the world into conflict. It was called such epic names as the Great War and the War To End All Wars. It devastated much of Europe and severely weakened Britain's standing in the world. Britain, in order to finance this war was forced to remove itself off the gold standard so that they could freely print money.
On the other side of the world in a magical land called America, filled with fat little pumpkin children and lollipop trees, President Thomas Woodrow Wilson and Treasury Secretary William Gibbs McAdoo were watching events unfold and saw the perilous cliff that the British Pound had placed itself. With just a little positioning, Wilson and his secretary thought, they could offer up the U.S. Dollar as a competing currency for the world's reserves. So, despite the great difficulty required, McAdoo did everything that was possible to keep the American dollar pegged to gold, to make it look appetizing to every other country out there. When the war ended, Britain attempted to take back their status as reserve currency of the world. They put themselves back on the gold standard but at the pre-war price which didn't account for all the monetary inflation that they had caused. This severely hampered their economy and weakened them even further. Wilson and McAdoo congratulated themselves on a job well-done. They had set the U.S. Dollar on a pedestal over every other currency in the world. And although not quite dominant over the Pound yet, they had set the events in motion that would lead to Bretton Woods and U.S. Dollar hegemony.
Now for the scary part of this fairy tale, for not all remained hunky-dory in the magical land of America. For in this magical land of lollipop trees and pumpkin children, a monster was born called the Federal Reserve, and it was in fact President Wilson's own son, spawned in the Demonic Halls of Compromise. This child would eventually become so powerful that no one could control it. It consumed and consumed, devouring toxic assets and bad debt left and right, using the great U.S. Dollar as toilet paper to wipe off its own excretions and effluent. When it ran out of toilet paper it just printed more and more until all the faulty loans had been consumed. But alas, there was now too many dollars in the world, and the other countries of the world looked upon it with scorn. They saw their own dollar reserves and grew skeptical about owning toilet paper as currency and began to seek an alternative to their wealth. Gold was rediscovered. Wads of excess toilet paper were used to buy new reserves of the shiny precious metal, and this incited a wave of exuberance where no one could be duped into holding the dollar any longer.
The magical land of America watched in horror as the dollars came flooding back home, no longer wanted by the world. The lollipop trees crumbled and all the fat little pumpkin children died, suffocated by the green sea of currency that blanketed the land. An evil night befell the kingdom and all that could be heard in the distance was the sound of the monster's flatulence as it continued it's spree of defecation.
Read the real story
HERE.
China Raises the Money-Printing Alarm
At a conference in Lake Como, Italy, a leading Chinese economic spokesman—Cheng Siwei—criticized Ben Bernanke’s loose monetary policy. “If they keep printing money to buy bonds it will lead to inflation,” said Cheng, “and after a year or two the dollar will fall hard.” Cheng went on to say that China was diversifying its roughly $700 billion of U.S. foreign-exchange reserves into gold. “Gold is definitely an alternative, but when we buy, the price goes up,” he said. “We have to do it carefully so as not to stimulate the market.”
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