Floating Currencies

There is an article in today's Wall Street Journal that confirms a lot of what we have said in the past in regards to printing money....money that is based on nothing of value.

It is ironic that the international monetary system of floating currencies is based on a theory called the "Optimal Currency Area" that celebrates the freedom of central banks to print money at will. The idea is that total freedom to create money would promote global progress and employment, smooth out business cycles, and prevent bubbles and their associated crises.

The irony is that the system is obviously suboptimal. It goes against the grain of globalization, the process that is defining our economic times. To accommodate the central bankers' wishes to control their own currencies, the floating system requires splitting the world's monetary markets into as many currency areas as there are countries.

Worse, as happened in the mid-1930s, when currencies also floated, countries are engaging in currency wars that nobody can possibly win. The objective of all warriors is to depreciate their currency more than the rest of the world.

Did you catch that? The central bankers of the biggest currencies are now trying to debase their currencies faster than the other central bankers in hopes we can make our products cheaper to the rest of the world. As we have said in other posts....history shows us that currency wars lead to trade wars, and trade wars lead to real wars.

Now pay close attention to this sentence;

This failure should lead us back to the drawing board to re-design the international monetary system, reversing the trend that prevailed during the 20th century. We started that century with a fundamental international currency, gold, which kept its value through time and was widely accepted around the world. We ended the century with more than 150 currencies that change their value constantly and at different rates from each other, in such a way that most currencies are not accepted in most countries.

There is that talk again about the need to have an one-world-currency.

See it here; http://online.wsj.com/article/SB10001424052748703493504576007962677071424.html?mod=WSJ_Opinion_LEADTop

Friends, the table is being set for the major currencies of the world, including the US dollar, to fall from value so that the world can then embrace a new global financial system.

Our lives, as we have known them, may be getting ready for a major shift. Are we hanging on tight to The Rock? Are our lives built on the Firm Foundation? Jesus tells us that if they aren't...they will not survive the coming storms.