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Norm’s note:

The American dollar as the world’s reserve currency is propped up by one thing alone, the American military (and it might be added that all national currencies are likewise propped up, at bottom, by a monopoly over the means of violence, over judiciary, police and military functions).

Therefore, the only thing that can possibly undermine America’s economic pre-eminence is the emergence of a military alliance sufficiently powerful to stare down American terror. That seems to be emerging through the Russian and Chinese alliance and as here indicated by Zimbabwe migrating to the Yuan.

As for the fluctuations in interest rates and the relative values of currencies, all of this is but a means of expropriating real world assets.

When interest rates are lowered by decree, debt surges; and when the rates are subsequently raised at the moment believed to be most propitious, bankruptcies ensue and real world assets, which were secured debt collateral, are forfeited.

Furthermore, when the American dollar surges in relative value on account of the interest rate increase, that is the moment during which the oligarchy goes on its buying spree in whatever areas in the world where their precious dollar now buys significantly more than it formerly did.

Financial crashes — as distinct from real world and recurring economic crises inherent to the capitalistic structure of production and exchange — are engineered for a purpose, with each successive crisis ending by having increased the concentration of private property into the hands of the superlatively rich. Financial and economic crises — unless pushed too far — do not augur the imminent collapse of capitalism but in fact are testaments to its robust efficacy.

Social and military collapse would be the only possible portents of an implosion of either capitalism or the U.S. empire.

The Most Revolutionary Act

Zim_map

According to the Guardian (and Al Jazeera, the Canadian Broadcasting Corporation, the Globe and Mail, the Australian Broadcasting Corporation and the New Zealand Herald), the US dollar took another major hit this week after Zimbabwe has made the Chinese yuan legal tender. According to minister of finance Patrick Chinamasa, the move comes after President Xi Jinping cancelled $40 million of Zimbabwean debt that comes due in 2015.

Zimbabwe abandoned its own dollar in 2009 after hyperinflation, which peaked at around 500 billion percent, made it unusable.

Following the demise of the Zimbabwean dollar, the country did business in various foreign currencies, including the US dollar, the South African rand and eventually the yuan. However up until now, most business was conducted in US dollars, and the yuan wasn’t approved for public transactions.

China is Zimbabwe’s biggest trading partner following Zimbabwe’s isolation by its former western trading partners…

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