“Before 1971, currencies were
pegged either directly or indirectly to gold. Therefore, there was nothing to
be gained by creating fiat money in order to buy any other country’s currency.
When the fixed exchange rate system ended with the collapse of the Bretton
Woods system, however, that changed. Gradually, it became apparent that a
country could gain an export advantage if its central bank created fiat money
and used it to buy the currencies of its trading partners.”
“Fed Chairman Ben Bernanke blamed the flood of foreign capital entering the
country on a global savings glut.
That is nonsense….The glut that inundated the United States was a glut of fiat
money created by central bankers intent on manipulating their currency in order
to boost their countries’ exports.”
“Never before has a country
incurred current account deficits on the enormous scale that the United States
has experienced in recent years. The reason the dollar does not depreciate
enough to correct the U.S. trade deficit is because many of the countries that
the United States trades with are manipulating the currency’s value by creating
fiat money and buying dollars.”
“While fiat money created for this
purpose is not solely responsible for bringing about the global economic
crisis, it has been one of the leading culprits.”