Is World War III looming in our future?
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Is World War III looming in our future?

Atlanta : GA : USA | Feb 22, 2013 at 9:32 AM PST
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VIDEO: Currency war threat looms over G20 ministers' meeting. Duration: 02:14

As my military commanders taught me long ago, the singular cause for all wars is rooted in economics. They went on to say that politicians eventually develop more palatable rationales for armed aggression to entice the masses to fight and die for an honorable cause. As Napoleon said, “A soldier will fight long and hard for a bit of colored ribbon,” motivated primarily by fear and self-interest, but no military man would ever admit to such manipulative heresy in today’s modern era.

Imagine issuing orders to the rank-and-file that we must attack Iraq to protect our access to oil from Saudi Arabia? Would you be willing to risk your life for that cause? But, suggest that WMDs -- those infamous weapons of mass destruction -- pose a threat to our national security, or that our objective was to spread democracy throughout the Arab world, then you might get a following that would save the day. The issue here is not the justification of war, but the true cause for unleashing Armageddon in the first place.

The Great Recession has surely taken its toll on humanity beyond all national borders, but highly anticipated recoveries have been uneven across the globe, especially between developed and developing countries. Asia, for the most part, has skirted the harshness of negative growth scenarios, but their emerging economies have still had to ratchet back severely due to reduced demand from the West. These markets have leveraged their low labor costs and built extensive export-driven economies that have fueled the greatest global redistribution of wealth in recorded history.

North America and Europe have been struggling to find the right formula to stimulate growth, a prelude to recovery and eventual prosperity, but none of the solutions of bygone eras have worked. Economists that have studied prior recessions claim that the severity of this recent one, involving both home construction and the banking sector, will require considerably more time for full recovery. Household incomes have fallen since June 2009, the official end of the recession, and show little sign of improvement.

Economists and historians, however, remain perplexed over the current situation. Many have scoured through the past to find similar event models or correlations that would suggest a better path for policymakers to take, but the historical record is only pointing to one sanguine conclusion. A number of articles are beginning to surface in the media that portend that storm clouds of war are on the horizon. World War I followed the Panic of ’08, and World War II followed a well-defined series of events after the Great Depression had taken its toll and all efforts to regain prosperity had proved futile.

Gerald Celente, the editor and publisher of the Trends Journal, has recently stated that the presence of currency wars was the actual precursor of trade wars in the past that eventually led to all out war. Government officials are trying to play down the currency war theme, but facts are facts. Celente adds:

“We’re in a currency war. Who are they kidding? The only reason world economies are doing anything is because of all the cheap money they’re dumping into the system. But they don’t call it currency wars, they have ‘white shoe boy names’ for them.”

Japanese Prime Minister Shinzo Abe has been leading the charge on the major currency-weakening front. The Yen has fallen in value over 20 percent versus the greenback during the past five months, as his government pursued a qualitative easing monetary policy. This program was mirrored after similar programs of ours, each designed to expand the money supply, weaken the currency, and increase demand for exports. Europe’s "white shoe boy name" for the activity is "Outright Monetary Transactions," or "OMT" for short, but all efforts seek to increase exports at the expense of someone else.

By whatever names we wish to attach to these activities, Celente does not like the picture forming before him. “I see this as a replay of history,” he says. “I see this as a lead up to world war.” The reality is that everyone cannot win with an export-driven approach, since it is a zero-sum game – at the end of the day, someone gets left holding the bag of excess goods. When major currencies devalue, emerging economies immediately suffer. Higher prices depress export strategies, inventories pile up, and capital freely exits the nation’s coffers for better returns elsewhere.

China and others have a history of controlling foreign exchange rates to protect against such severe consequences. By buying foreign securities, while prohibiting other nations from buying theirs, they weaken demand for their respective currencies. China has over $3 trillion in foreign exchange reserves that would normally suggest a much stronger rate than prevails today, but Japan’s initiative has thrown the proverbial wrench into the economic apparatus for China and others like South Korea, Singapore and Taiwan.

Finance ministers and central bankers recently convened at a G20 summit in Moscow to downplay the brewing war clouds. Britain's finance minister, George Osborne, said the group’s communiqué stated that, “currencies should not be used as a tool of competitive devaluation," but his personal conclusion was that, “Countries shouldn't make the mistake of the past of using currencies as a tool of economic warfare."

The head of the International Monetary Fund (IMF), Christine Lagarde, also chimed in to defuse the situation. “There's been lots of talk of currency wars, and we have not seen any such thing as a currency war. We've heard currency worries, not currency wars," said Lagarde. "We've not seen confrontation but deliberation, dialogue, discussions and clearly this G-20 meeting has been extremely helpful and productive.”

If currency wars are a prelude to armed warfare, then let’s not sugarcoat them with bureaucratic sophistry. Our nation is already straining after four decades of off-shoring activities. The bleeding has to stop, or more bleeding will follow, either in boardrooms or on modern-day battlefields. Newer technology will only make war more intolerable than ever before, unless more is done on a coordinated basis to relieve the stress.

In 1995, Keanu Reeves starred in the sci-fi flick, “Johnny Mnemonic,”, which portrayed the future as a world dominated by mega-corporations with strong East Asian influences. Perhaps the futurists saw what was coming way back then. The movie was a flop, but today’s reality is eerily similar. We are a debtor nation, and we are angry. Economic angst can easily escalate to something worse. Something has to give. Lean Forward!

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References: Embedded links provided, but points made are primarily the opinion of the author.

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VIDEO: Currency war threat looms over G20 ministers' meeting. Duration: 02:14. Originally filed: 211010.
VIDEO: Currency war threat looms over G20 ministers' meeting. Duration: 02:14. Originally filed: 211010.
TomCleveland is based in Gainesville, Georgia, United States of America, and is an Anchor on Allvoices.
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