Wise Owl (@Jalapeno)

Iran is an important creature of the offshore global financial system centered in London, which estimates claim to have $80-$120 trillion in assets. This dollar based banking system is completely outside U.S. control. However, when this offshore system. and its increasingly unsupportable debt hits a liquidity crisis, like in 2008 and 2020, it is the Federal Reserve that bails it out with $trillions. All the major banks that are active in this offshore system have been technically bankrupt since 2008. Only the expansion of liquidity by the Fed, along with derivative hedging in the $quadrillions, illicit money flows, shadow banking, the accelerated looting of nations, and financialization scams everywhere, are what is keeping this offshore system from a spectacular meltdown. Iran's role in this is crucial. By terrorizing the Middle East and provoking instability, Iran is helping drive the oil profits of the region into the offshore system, rather than into regional national developments. This is why Iran is getting so much support from the offshore system, and why Scott Bessent has begun moving against that. In this respect, at the just concluded Fed meeting in Jackson Hole, WY, Fed chair, Kevin Warsh, announced the abandonment of the Fed giving forward signals to stop the major banks from gaming the system. Along with this, Warsh announced that the Fed is pulling back on discounting bankrupt banker assets. The Fed, under the Trump Presidency, is making it clear that it is no longer committed to underwrite the global offshore system. However, at Bessent's press conference on implementing Operation Isolation of Iran, Bessent indicated a concern about not blowing out the entire financial system, which is the "sword of Damocles" keeping the bailouts of the offshore system occurring at the expense of national development. So how does a new system that favors nations emerge to replace the offshore system without causing a collapse? Removing the Fed guarantees to always bail out the system facilitates the discussion for adopting a different system. Removing the threat of Iran is another part of this, which frees up the liquidity of the oil profits for investment in national development. Since the U.S. is the guarantor of this, a share of that gets invested in the U.S. Creating internal national credit mechanisms, including possibly the Fed opening up a discount window for this purpose, is also another part of this. But most importantly, it is the promotion of the most rapid rate of the industrialization of the U.S. that will increase the future value of the U.S. dollar. It is the projected future value of the U.S. dollar that will give the current dollar enough worth to maintain its universal exchange status, while the world transitions out of the London based system. This is what could finally free nations from the destructive financial pestilence of oligarchy that has been destroying us. -- Paul Glumaz