Earthquakes and Tsunamis

My heart goes out to all of Japan, suffering through a terrible natural disaster.

Reflecting on events, I could not help but think about parallels in the international monetary system. The stresses and imbalances in the dollar reserve system, sometimes called Bretton Woods II, have been building up since 1971.

Like the stresses on a fault line, sometimes you feel rumblings, sometimes you get small tremors, but the big changes tend to come unannounced and all at once as the pressure is relieved. The final event itself may not even cause the most damage, but may set in motion destructive forces greater than anyone can imagine. The financial tsunami that follows the end of the dollar reserve system may destroy many economic and political foundations long thought safe from harm.

Unlike a real earthquake, the financial one to come is man made, the result of a system designed to benefit the central planners and bankers for whom it was constructed.