Californious est omnis divisa in partes tres

FINE PRINT: What follows is a work of fiction. Any references to persons, legal entities or governments (living or dead or undead) is purely coincidental. The following is for entertainment purposes only.

How is your Latin? Similar words were uttered by Caesar when speaking of the soon to be conquered area known as Gaul (France/Belgium/Some Switzerland).

Similiarly we await our modern day Caesar to proclaim the future of the vanquished, bankrupt piece of geography known as California. The 8th largest economy of the world is insolvent and they are too big to fail.

If we accept that patterns of the past will guide our future then permit me to run a scenario. Chrysler was too big to fail and the recovery plan in place for this major car company may be just the answer to the California problem. Let's get started:

The current plan is that 55% of Chrysler goes to its labor unions. 35% goes to the Fiat car company- an Italian company. Neither of these groups actually owns any significant portion of Chrysler today so they are getting 90% of the company at no cost. The remaining 10% goes to the original owners of Chrysler who, by the way, used to own 100% of the company [but not anymore].

Now for the entertainment portion of this posting:

THE CHRYSLER FORMULA FOR CALIFORNIA

(1) Let's give 55% of all assets in California to the state labors unions.

(2) For the 35% piece, we need to find a non-US constituent that willing to accept 35% of the assets (at no cost to themselves). I suggest Mexico. California used to belong to Mexico and it seems only proper to return at least a portion back to Mexico at this time. Fairness at work, don't you think? Plus I would suggest that the US Government also issue an apology too, just for good measure.

(3) The remaining 10% would remain with the citizens of California. Which means each home owner would own only 10% of their house. Same with their car, their 401K, their bank account, their motoways, their stadiums, etc. etc. etc. If you own a business in California, you would now only own 10% of it.

Oh, by the way, if you own any California issued bonds, they are worthless. Yes, I know that US law requires secured bond holders to be paid first, but that law was overridden, without recourse, by the US Government. No legislative oversight. No judicial review.

If it will work for Chrysler it will work for California.

A new one-world currency - Final Chapter

This will be last in a series of three posts on why a one-world currency will emerge to replace the US Dollar. My first two posts are here:

(1) http://tedbits.blogspot.com/2009/04/secret-societies-are-your-friend.html
(2) http://tedbits.blogspot.com/2009/04/worlds-8th-largest-economy-seeks-us.html

This final segment sums it all up. This is happening so fast that I began to get concerned that this treatise would be historical rather than predictive. Example: China allows the Yuan to be an international trade settlement currency-- that happened much faster than I thought it would.

PART III--- We are all going to be poorer together....

The concept of the EURO has its positives and negatives. And, as long as every sovereign nation sharing the currency is not failing "too much", it all works out. However, get a few "weak sisters" in the family and sooner or later the other brothers and sisters tire of carrying them. Keep an eye on Greece, Italy and Spain.

The UK didn't play the EURO game but that didn't make them immune. Their recent government bond auctions were under subscribed. That means no one wants your "IOUs" at the interest rate you offer or maybe at all. This is now happening in the US as the Treasury Auction has been under subscribed. No worries mate, the Federal Reserve (which is not part of the US Government but rather a private bank that the US government entrusted with the power to create money out of "thin air") will buy the bonds so the US government saves face.

Poor Iceland. Nobody wants their currency which means they can't buy anything. No one will loan them money because they don't have any money that is worth anything to payback the loan.

Actually, there are a lot of countries that are bankrupt-- some are doing desperate things. Zimbabwe is probably the worst. But, Argentina confiscated every one's pension savings. Venezuela is selling their soul to China. And, I could go on...

The risk of sudden military action is great. China has bought everything from mineral rights to political control in many countries. They are using US dollars to do it. What they can't buy they are now prepared to take as their military build up is approaching unprecedented proportions.

Don't think China will do it? You try dealing with several billion unhappy people all at once. Do I need to tell you what happens? You see, no other country faces the challenges that China does. No other country, nor its citizens, truly understands China's dilemma. And because we don't understand, we are in denial about what may happen.

But what about the US? Yes, quite a few "bad actors" has ruined the show for everyone else. The country entrusted to be the steward of the world's only "reserve currency". The country that is the world's policeman, who only asked one thing of every other country which was: "May we have a place to bury our dead soldiers who defended you?". That country created too many financial instruments that created too much dollars out of nothing. And when everything started to crash, continued to print more money to solve the problem.

“The significant problems we face cannot be solved at the same level of thinking we were at when we created them.”
Albert Einstein

But "printing money" in this sense does not really happen. It is more about moving numbers across a computer screen. Want to add more US Dollars to the world? Simply type in the desired amount into the Federal Reserve's computerized balance sheet. The rest is automatic. Quantitative easing, printing money, increasing the asset number on your balance sheet by typing it in... they all mean the same thing.

And every government is doing it. Why? Because it is easy and does not require any sacrifice from the people in that country. It keeps the current politicians in power.

But won't this burden future generations with debt, you might ask? No. Debt is only real if you plan to pay it off. Let me say that again. The only people concerned about debt are those that feel an obligation to pay the debt off.

Hence the emergence of Special Depository Receipts (SDR), the new world currency. It will not replace your country's currency but it will stand between your currency and the exchange rate of every other country's currency.

This means that there will no longer be a USD to EURO exchange rate. All currencies will be expressed in terms of SDRs.

So here is the sequence:

(1) All governments "print money" to deal with the economic collapse.
(2) Printing money results in inflation.
(3) Inflation hurts the people.
(4) All nations devalue their currency against the SDR
(5) The national debt of each country is reduced by the devaluation.
(6) Inflation is curtailed.
(7) Everyone is poorer because everyone's currency is worth less.

Now you understand why so much money is being printed and an unprecedented money grab is now underway. When everyone's currency is devalued, we are devalued together. But if I have been able to "front run" this devaluation and collect more pieces of paper now, I will be relatively better off than you when devaluation occurs. I got richer while everyone (including me) got poorer simultaneously.

The math is simple.


Epilogue: I know this is difficult to understand because it is hard to describe:
http://tedbits.blogspot.com/2008/12/gravity-and-inflation-point-of-view.html

But history tells us that the youthful America destroyed the Pound Sterling (a former global reserve currency). Also, the US Government confiscated gold from its citizens paying $28/ounce and then, when the deed was done, fixing the price of gold at $35/ounce basically devaluing everything by 25%.

It happened. It happens.

And now that you know what is going to happen, rest easy because there is nothing you can do about it.