March 18th, 2011
By: Ambrose Evans-Pritchard
The dollar plunged instantly against the euro, yen, and sterling as the comments flashed across trading screens. David Bloom, currency chief at HSBC, said the apparent policy shift amounts to an earthquake in geo-finance.
“The mere fact that the US Treasury Secretary is even entertaining thoughts that the dollar may cease being the anchor of the global monetary system has caused consternation,” he said.
Mr Geithner later qualified his remarks, insisting that the dollar would remain the “world’s dominant reserve currency … for a long period of time” but the seeds of doubt have been sown.
The markets appear baffled by the confused statements emanating from Washington. President Barack Obama told a new conference hours earlier that there was no threat to the reserve status of the dollar.
“I don’t believe that there is a need for a global currency. The reason the dollar is strong right now is because investors consider the United States the strongest economy in the world with the most stable political system in the world,” he said.
The Chinese proposal, outlined this week by central bank governor Zhou Xiaochuan, calls for a “super-sovereign reserve currency” under IMF management, turning the Fund into a sort of world central bank.
The idea is that the IMF should activate its dormant powers to issue Special Drawing Rights. These SDRs would expand their role over time, becoming a “widely-accepted means of payments”.
Mr Bloom said that any switch towards use of SDRs has direct implications for the currency markets. At the moment, 65pc of the world’s $6.8 trillion stash of foreign reserves is held in dollars. But the dollar makes up just 42pc of the basket weighting of SDRs. So any SDR purchase under current rules must favour the euro, yen and sterling.
Beijing has the backing of Russia and a clutch of emerging powers in Asia and Latin America. Economists have toyed with such schemes before but the issue has vaulted to the top of the political agenda as creditor states around the world takes fright at the extreme measures now being adopted by the Federal Reserve, especially the decision to buy US government debt directly with printed money.
Mr Bloom said the US is discovering that the sensitivities of creditors cannot be ignored. “China holds almost 30pc of the world’s entire reserves. What they say matters,” he said.
Mr Geithner’s friendly comments about the SDR plan seem intended to soothe Chinese feelings after a spat in January over alleged currency manipulation by Beijing, but he will now have to explain his own categorical assurance to Congress on Tuesday that he would not countenance any moves towards a world currency.
September 24, 2010
What used to be talked about as “conspiracy theory” is now being discussed openly among the nations of the world. A global currency called the “Bancor” may soon be the global currency, and along with it a global central bank.
“Give me control of a nation’s money and I care not who makes her laws.”
Those were the words of Mayer Amscel Rothschild of the Elite Rothschild Banking Family of Europe. And it is apparent that those in power hope to gain control of not only a single nation’s money, but of all nations’ monetary systems into a single Central Bank with a Global Currency. In that instance, whoever controls the monetary system of the world, will in effect control the policies and laws globally as well.
One of the priliminary measures of incorporating a global currency, however, seems to be the destruction of currencies around the globe in order to justify its inception.
Steps for bringing about this New World Order currency have been in the works for a long time, and the proponents are patient and deliberate. Calls for a global currency began to come about after WWII, when John Maynard Keynes and the British government proposed the “Bancor” as a world reserve currency.
Although it has taken time and effort, it looks as though the current economic crisis has set the stage for the demise of the dollar as a world reserve currency to make way for the proposed Bancor.
The Federal Reserve and our government are also in on the plan apparently, as the Fed continues to devalue the dollar through “easing” as they call it, or printing more and more of it. Our government then continues to grow and spend more and more as well, only to exasterbate the problem.
Of course, Secretary of Treasury Timothy Geithner said back in 2009 that the U.S. would be open to a world currency as well!
In this video Geithner was at a Council on Foreign Relations conference, and was asked about a proposal from China’s Central Bank Governor to expand the role of the IMF’s use of SDRs (Special Drawing Rights), whereupon Geithner said ” ..We’re actually quite open to that suggestion.”
Geithner then went on further to say however, that ” ..But you should think of it as rather evolutionary building on the current architecture, rather than to moving us to a global monetary union.” Geithner obviously knows that increasing the use of SDRs to the IMF will eventually make way for “a global monetary union” as he puts it.
How do I know this? In a recent document by the International Monetary Fund, drafted on April 13, 2010 titled Reserve Accumulation and International Monetary Stability , the report shows that while there are benefits to the use of SDRs, there are also some limitations and drawbacks.
One of those drawbacks stated in the same document is the fact that the SDR is not a currency:
From SDR to Bancor. A limitation of the SDR as discussed previously is that it is not acurrency. Both the SDR and SDR-denominated instruments need to be converted eventually to a national currency for most payments or interventions in foreign exchange markets, which adds to cumbersome use in transactions. and though an SDR-based system would move away from a dominant currency, the SDR’r value remains heavily linked to conditions and performance of the major component countries.A more ambitious reform option would be to build on the previous ideas and develop, over time, a global currency. Pg 26. (emphasis mine)
Also to be noticed is the latter portion of the video, where Geithner says these very pertinent words:
“It is very important just to underscore that… the future evolution of the dollar’s role in the system, depends really primarilly on how effective we are here in the United States, in getting not just recovery back on track, our financial system repaired, but we get our fiscal position back to the point where people will judge it as sustainable..”
If these are the parameters for avoiding a global currency, then we are in serious trouble. It looks as though we may see the bancor soon.
In an article by James Turk on Kitco.com, he states clearly that the Fed is printing too much money and rapidly devaluating the dollar. He states in the article that commodity prices are rising not because of good economic activity, but because of what the Fed calls “quantitative easing“. He states two reasons for this:
1. Because too much money has been printed for years, not just over the past three months, which can be illustrated by comparing M3 to the total US population. In 2000 there were $26,977 in circulation, as measured by M3, for every man, woman and child in the United States. That amount has ballooned to $46,538, a 7.1% annual rate of growth, which is more than 7-times the 0.9% annual rate of population growth during this period.
2. Demand for money is usually ignored, but it is an important part of the equation. Unfortunately, demand cannot be measured, so we again need to rely on observations of market prices to determine the prevailing trend in the demand for dollars at any moment. So, for example, let’s look at the US Dollar Index, which measures the dollar’s rate of exchange against a basket of currencies. While commodities have been rising since June 4th, the Dollar Index has been falling. It is down 7.9% over this period, a 27.6% annualized rate of decline. Given that people are opting to hold other currencies in preference to the dollar, as evidenced by the dollar’s falling exchange rate, it is clear that the demand for the dollar is falling.
Carrol Quigely stated a similar development of a world bank in collaboration with central banks around the world, but with far more sinister motives and not the rosy picture Mr. Stephen Gallo is painting:
“The powers of financial capitalism had another far reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements, arrived at in frequent private meetings and conferences. The apex of the system was the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the worlds central banks which were themselves private corporations. The growth of financial capitalism made possible a centralization of world economic control and use of this power for the direct benefit of financiers and the indirect injury of all other economic groups.”
Tragedy and Hope: A History of The World in Our Time (Macmillan Company, 1966,) Professor Carroll Quigley of Georgetown University
The housing market collapse, auto industry government takover, Wall Street and Banker bailouts, as well as the reduction in manufacturing here in the United States among other things, are all contrived events by the Elites in order to systematically crush our economy and our currency, in order to make way for this ominous takeover of the world’s monetary systems and the completion of a New World Order Feudalistic Dictatorship.
July 30, 2010
Depending on how fast its exchange rate rises, China is on course to overtake the United States and vault into the No.1 spot sometime around 2025, according to projections by the World Bank, Goldman Sachs and others.
China came close to surpassing Japan in 2009 and the disclosure by a senior official that it had now done so comes as no surprise. Indeed, Yi Gang, China’s chief currency regulator, mentioned the milestone in passing in remarks published on Friday.
“China, in fact, is now already the world’s second-largest economy,” he said in an interview with China Reform magazine posted on the website of his agency, the State Administration of Foreign Exchange.
“China is still a developing country, and we should be wise enough to know ourselves,” Yi said, when asked whether the time was ripe for the yuan to become an international currency.
Can It Be Sustained?
China’s economy expanded 11.1 percent in the first half of 2010, from a year earlier, and is likely to log growth of more than 9 percent for the whole year, according to Yi.
China has averaged more than 9.5 percent growth annually since it embarked on market reforms in 1978. But that pace was bound to slow over time as a matter of arithmetic, Yi said.
If China could chalk up growth this decade of 7-8 percent annually, that would still be a strong performance. The issue was whether the pace could be sustained, Yi said, not least because of the environmental constraints China faces.
In an assessment disputed by Beijing, the International Energy Agency said last week that China had surpassed the United States as the world’s largest energy user. If China can keep up a clip of 5-6 percent a year in the 2020s, it will have maintained rapid growth for 50 years, which Yi said would be unprecedented in human history.
The uninterrupted economic ascent, which saw China overtake Britain and France in 2005 and then Germany in 2007, is gradually translating into clout on the world stage.
China is a leading member of the Group of 20 rich and emerging nations, which since the 2008 financial crisis has become the world’s premier economic policy-setting forum.
In one important respect, however, China is still a shrinking violet: anxious to shield itself from the rough-and-tumble of global markets, it does not permit its currency to be freely exchanged except for purposes of trade and foreign direct investment.
And Yi said Beijing had no timetable to make the yuan fully convertible.
“China is very big and its development is unbalanced, which makes this problem much more complicated. It’s difficult to reach a consensus on it,” he said.
In the same vein, China was in no rush to turn the yuan into a global currency.
“We must be modest and we still have to keep a low profile. If other people choose the yuan as a reserve currency, we won’t stop that as it is the demand of the market. However, we will not push hard to promote it,” he added.
No Big Rise in Yuan
China has been encouraging the use of the yuan beyond its borders, allowing more trade to be settled in renminbi and taking a series of measures to establish Hong Kong as an offshore center where the currency can circulate freely.
But Yi said: “Don’t think that since people are talking about it, the yuan is close to becoming a reserve currency.
Actually, it’s still far from that.” He said expectations of a stronger yuan, also known as the renminbi, had diminished.
There was no basis for a sharp rise in the exchange rate, partly because the price level in China had risen steadily over the past decade. “This suggests that the value of the renminbi has moved much closer to equilibrium compared with 10 years ago,” he said.
Yi’s comments are unlikely to go down well in Washington, where lawmakers have scheduled a hearing for Sept. 16 to consider whether U.S. government action is needed to address China’s exchange rate policy.
China scrapped the yuan’s 23-month-old peg to the dollar on June 19 and resumed a managed float. The yuan has since risen only 0.8 percent against the dollar, and economists calculate that it has fallen in value against a basket of currencies.
China would stick to the principle of holding its $2.45 trillion of official reserves in a mix of currencies and assets.
The stockpile — the world’s largest — was so big that it was impossible to adjust its currency composition in a short space of time: “We won’t be particularly bearish on the dollar at a given time or particularly bearish on the euro at another time.”
Today, Kevin explains why you should throw your microwave away and why the government is trying to ban the word ‘retarded.’
Truth About Irradiated Food
Salmonella Recalls Continue To Grow
The Dangers Of Genetically Modified Food
BPA Causes Neurological Problems
BPA Toxins Found in 90% of Newborns
More Excuses To Get You Hooked On Drugs
Jenny McCarthy vs Vaccine Industry
Take Trudeau on the Go! Click here to download this show to your iPod, mp3 player, or PC through iTunes!
January 4, 2010
By Paul Joseph Watson
A recent announcement by the United Nations that it will begin to mint gold and silver bullion coins bearing the UN logo has raised fears that a new global currency is being readied to replace the dollar, but the story is likely to be a hoax, muddying the waters of the very real move towards a global monetary system.
“The United Nations (UN) has licensed the minting of gold bullion coins bearing its logo to provide a “public option” world savings currency,” stated the original story.
The source of the story was attributed to both the Vancouver Examiner and Adfero Limited and it featured on the World Gold Council website, but the link to the article now gives a 404 error page. There is nothing on the UNCTAD website to verify the authenticity of the story.
Posters on the Ron Paul Forums dismissed the story as a hoax. “I posted this a while back, but there was no primary data source to back it up. Nothing on the UN’s site either, it’s more than likely a hoax” writes one.
Others have also questioned how the UN can afford to buy gold to mint its own coins, tying the development in with other suspicious circumstances surrounding alleged manipulation of gold prices.
“Where did the gold come from for the UN to start minting its own coins?” asks Gold Investing News. “For sure, the UN doesn’t have an official budget to buy tonnes of gold on the open market.”
“The story, which seems to have had little basis in fact and a lot of basis in speculation or imagination, has now been pulled from the site as it is not factual….The UN only issues commemorative coins.” writes BullionGoldCoins.com.
Posters on the Prison Planet Forum questioned the motives behind putting out a fake story about the move towards a world currency, suggesting unscrupulous people were “testing the water” on how the public would react to the announcement.
Just like the fake Amero coins hoax story which was put out by disgraced FBI informant Hal Turner, the UN gold story will still be parroted years from now by gullible people unaware of the fact that it’s a hoax. This in turn will allow debunkers to exploit the confusion and claim that the entire one world government agenda is a paranoid invention, when the process of its implementation is publicly announced on an almost daily basis.
The all too real move towards a global currency was unveiled at last year’s G8 summit in Italy, when Russian President Dmitry Medvedev displayed a coin to reporters a coin representing a “united future world currency”.
“We are discussing both the use of other national currencies, including the ruble, as a reserve currency, as well as supranational currencies,” the Russian leader said at a news conference.
This followed comments made by U.S. Treasury Secretary Timothy Geithner to the Council on Foreign Relations, in which he assured CFR globalists that the U.S. was “open” to the notion of a new global currency system to replace the dollar.
In addition, the scandal-ridden and highly secretive Bank For International Settlements, considered to be the world’s top central banking power hub, released a policy paper in 2006 that called for the end of national currencies in favor of a global model of currency formats.
The march towards a global currency is real, provable and openly documented. The UN gold hoax story has seemingly little purpose other than to poison the well with disinformation, thereby inadvertently detracting credibility from those who are warning of a global government takeover which manifests itself in a myriad of different ways at every major global summit, from the G8 to last month’s Copenhagen conference.
The REAL global currency coin, as unveiled by Russian President Medvedev at last year’s G8 summit in Italy. Click here for a larger image of the coin.
October 29, 2009
By Paul Joseph Watson
Billionaire globalist George Soros told the Financial Times during an interview that China will supplant the United States as the leader of the new world order and that America should not resist the country’s decline as the dollar weakens, living standards drop, and a new global currency is introduced.
Asked what Obama should discuss when he visits China next month, Soros stated, “This would be the time because I think you really need to bring China into the creation of a new world order, financial world order,” adding that China was a reluctant member of the IMF who didn’t make enough of a contribution.
“I think you need a new world order that China has to be part of the process of creating it and they have to buy in, they have to own it in the same way as the United States owns…the current order,” said Soros, adding that the G20 was a move in this direction.
Soros said that there was a flight from currencies across the board, and that this is why the price of commodities, notably gold and oil, were generally rising. He also stated that an orderly decline of the dollar was “desirable” and that the entire system needed to be reconstituted towards a global currency.
“You need a new currency system and actually the Special Drawing Rights do give you the makings of a system and I think it’s ill-considered on the part of the United States to resist the wider use of Special Drawing Rights, they could be very useful now when you have a global shortfall of demand, you could actually internationally create currency through Special Drawing Rights,” said Soros, explaining that this was already in process after the IMF injected an allocation of Special Drawing Rights (SDRs) equivalent to $250 billion into the global economy.
Soros also stated that richer countries were already transferring wealth to poorer countries via SDR’s, with the IMF paying for the half per cent transaction cost.
Soros said the world would have to go through a “painful adjustment” following the decline of the dollar and the introduction of a global currency. Reading between the lines, he essentially threatened to kill the dollar completely if the United States did not get on board with the global currency.
Soros predicted that China would become the new engine of the global economy, replacing the U.S., and that this would slow economic growth and reduce living standards. Soros characterized the United States as a drag on the global economy because of the declining dollar.
September 24, 2009
By P. Parameswaran
The embattled US dollar is expected to come under scrutiny at a summit of developing and industrialized nations following China-led calls to review its role as a reserve currency.
The dollar issue is bound to surface at the two-day meeting in Pittsburgh as US President Barack Obama and other leaders of the Group of 20 economies debate a new framework for tackling the so called global “economic imbalances” blamed for fuelling the latest financial crisis.
“Though not clear how the plan would be enforced, it would involve measures such as the US cutting its deficits and saving more, China reducing its reliance on exports and Europe making structural changes to boost business investment,” analysts at French bank Societe Generale said in a report.
Some argue that the financial crisis resulted from imbalances between savings and investment in major economies, which have led to large current deficits, as evident in the United States, and surpluses, as enjoyed by China.
Beijing was the first to call for a new global currency as an alternative to the US dollar as the US deficit rocketed — the White House estimates it could reach nine trillion dollars over a decade.
Chinese Premier Wen Jiabao expressed concern as early as March over the safety of his country’s huge US bond holdings now worth more than 800 billion dollars, making it the largest creditor to the United States.
Then, Chinese central bank governor Zhou Xiaochuan, who supervises more than two trillion dollars worth of dollar reserves, the world’s largest, raised the stakes by calling for a new reserve currency in place of the dollar.
He wanted the new reserve unit to be based on the SDR, a “special drawing right” created by the International Monetary Fund, drawing immediate support from Russia, Brazil and several other nations.
“These countries realize that they would suffer losses if inflation eroded the value of the dollar securities they own,” said Richard Cooper, a professor of international economics at Harvard University.
But he said there were no feasible alternatives to the US dollar as a widely used international currency, discounting even IMF’s synthetic SDR currency, comprising a basket of the dollar, euro, yen and the pound.
“The dollar will remain the dominant world currency, thanks to the stability of our political system and the rule of law that isn’t a feature of many other economies,” said Irwin Stelzer, director of economic-policy studies at the Washington-based Hudson Institute.
Some groups, he said, were buying euros and other currencies from time to time, “but not in amounts that threaten the dollar’s primacy.”
Even the Chinese are stuck with nearly a trillion dollars worth of US bonds and are not likely to drive down the value of that hoard by selling large amounts of dollar-denominated assets, Stelzer said.
September 7, 2009
By Edmund Conway
In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises.
It added that the present system, under which the dollar acts as the world’s reserve currency , should be subject to a wholesale reconsideration.
Although a number of countries, including China and Russia, have suggested replacing the dollar as the world’s reserve currency, the UNCTAD report is the first time a major multinational institution has posited such a suggestion.
In essence, the report calls for a new Bretton Woods-style system of managed international exchange rates, meaning central banks would be forced to intervene and either support or push down their currencies depending on how the rest of the world economy is behaving.
The proposals would also imply that surplus nations such as China and Germany should stimulate their economies further in order to cut their own imbalances, rather than, as in the present system, deficit nations such as the UK and US having to take the main burden of readjustment.
“Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability,” said Detlef Kotte, one of the report’s authors. “But you will also need a system of managed exchange rates. Countries should keep real exchange rates [adjusted for inflation] stable. Central banks would have to intervene and if not they would have to be told to do so by a multilateral institution such as the International Monetary Fund.”
The proposals, included in UNCTAD’s annual Trade and Development Report , amount to the most radical suggestions for redesigning the global monetary system.
Although many economists have pointed out that the economic crisis owed more to the malfunctioning of the post-Bretton Woods system, until now no major institution, including the G20 , has come up with an alternative.
June 27, 2009
By Oliver Biggadike and Ye Xie
June 27 (Bloomberg) — The dollar declined the most against the euro in a month and dropped versus the yen after China repeated its call for a new global currency.
The Swiss franc declined against the euro and dollar this week as foreign-exchange analysts said the central bank sold its currency three times to support the economy. The greenback fell against most of its major counterparts after the People’s Bank of China said yesterday the International Monetary Fund should manage more of members’ foreign-exchange reserves.
“The dollar’s status as a reserve currency is being questioned,” said Benedikt Germanier, a foreign-exchange strategist in Stamford, Connecticut at UBS AG, the second- largest currency trader. “There are reasons to sell the dollar.”
The U.S. currency fell 0.9 percent to $1.4056 per euro this week from $1.3937 on June 19, the swiftest depreciation since the five days ended May 29. The dollar fell 1.1 percent to 95.18 yen from 96.27, its third consecutive weekly drop. The euro decreased 0.3 percent to 133.85 yen from 134.18.
Federal Reserve policy makers said on June 24 inflation “will remain subdued for some time” and that the economy warrants an “extended period” of low rates.
The 10-year Treasury yield fell the most since March as investors bet the Fed will keep interest rates close to zero for the rest of the year. The difference in yield, or spread, between 2- and 10-year yields decreased this week to 2.43 percentage points, near the narrowest level since May 20.