Dollar Replacement Beat Goes On … and On
Wednesday, April 20, 2011 –
Read at the original site, The Daily Bell –
http://www.thedailybell.com/2116/Dollar-Replacement-Beat-Goes-On-and-On.html
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Expert: U.S. should ‘give up on the dollar’ – The push to replace the U.S. dollar as the world’s reserve currency has been gaining steam, with one expert arguing that America “must give up on the dollar.” In a Financial Times op-ed, Michael Pettis, a finance professor at Peking University, said U.S. policymakers should lead the charge to create a more diverse reserve system, “in which the dollar is simply first among equals.” The dollar has been the dominant reserve currency for decades, with central banks and other institutions around the world amassing vast reserves. Pettis argues that this has resulted in dangerous trade imbalances that threaten to destabilize the global economy. – CNN
Dominant Social Theme: Get rid of the dollar and all will be well. An “expert” says so.
Free-Market Analysis: This article from CNN comments on an editorial that just appeared in the Financial Times, which like the Economist magazine, tends to enunciate the positions of the Anglo-American power elite. It confirms our suspicions once again that Western elites have in mind swapping out the dollar, and maybe sooner rather than later. The idea of course is that if Western elites can create something closer to a one-world currency, global government itself becomes a considerably more realistic proposition.
The ramifications of course are profound. But there is no way to accomplish such a move without launching a huge promotional effort. This seems to us just what is going on. The larger populations especially of the West must get used to the idea of a new currency and thus, almost every day (or week) we hear of a new initiative aimed at weakening or otherwise “broadening” the dollar reserve system and eventually replacing it.
George Soros just hosted a dollar-replacement summit that he called a new “Bretton Woods.” It didn’t really make headlines but it wasn’t supposed to. Its existence was the big story, and it got loads of ink leading up to the letdown of the summit itself. The International Monetary Fund has taken to issuing white papers explaining how its SDRs can be turned into a true world currency complete with a real bond market. The BRICS, as we reported yesterday, are meeting regularly to create their own currency swaps that exclude the dollar. And now, in upcoming meetings the G20 (meeting again!) are to take up the issue of the dollar’s shaky footing.
We find the whole thing increasingly contrived, as we have stated before. The dollar in our view was purposefully destabilized by the US Federal Reserve and by the Bush administration via serial wars, aggressively low interest rates and Bush’s strange habit of endlessly refusing to veto expansive legislation. Anyone who studies the Bush presidency can see a trend leading the US economy into economic oblivion.
Now why would the President of the United States want to do such a thing? Well, if your family has elite connections going back generations (as the Bush family does) and if Western elites want to create a global government, they need to move the world from a series of disparate currencies to just one – and in order to do that, the dollar reserve itself must be undermined.
Of course, those involved aren’t simply going to come out one day and announce that the new world order demands a new currency and therefore policies have been put in place to undermine the dollar (and perhaps the euro as well, new as it is).
No, it will be done, as so much is these days, furtively. The dollar will be destabilized softly, over an extended period of time along with America’s national sovereignty. And in order to acclimate people to what is happening, various groups and editorialists will continually comment on upcoming changes. It is quite possible to categorize this recent FT editorial as one such desensitizing gambit.
In his editorial, Pettis (an economics professor in Peking of all places) rolls through the whole rusty paradigm of dollar replacement. Of course that’s just the point. Promotions don’t seek to be original. They’re supposed to be repetitive – that is how dominant social themes morph into memes. Thus Pettis repeats for the umpteenth time that “countries such as China have been able to ‘game the system’ by stockpiling dollars, which has allowed them to grab a larger share of global demand for goods and services.”
He points out predictably (and incorrectly), that money instability has reduced currency availability within the United States and thus jobs (that’s not true) and flowed to “red hot” job markets in developing economies elsewhere in the world. The United States, he writes, then has to make a Hobbesian choice between printing more money (adding to the deficit) and “stimulating” the economy or opting for a more fiscally conservative approach that will leave unemployment consistently high.
Never mind that we hear over and over again that the US job situation is improving (it likely is not). The dollar reserve system actually collapsed in 2008 and had to be revived by an incomprehensible injection of some US$20 to US$50 trillion in loans and other sorts of dollar funding schemes – not just in the US but also around the world.
While the dollar system was propped up for a time, it is probably beyond salvage. The job situation in the US is terrible (not because of currency flows as Pettis argues) because the whole economic system is so distorted that it is impossible to tell a healthy company from an unhealthy one. Businesses don’t want to hire and people are yet reluctant to spend.
Even if this situation changes, economic health will not improve much because central banks around the world will then have to raise rates and otherwise “sterilize” the world’s economy of its massive dollar overhang. Rates go up and economic vigor, what there is of it, begins to recede. This can go on for years.
Pettis also runs through the usual options when it comes to the dollar’s replacement. He examines the euro, before discarding the idea and then takes a look at the International Monetary Fund’s SDRs. In fact, we have come to believe that Western elites dearly wish to replace the dollar with some sort of SDR derivative. Here’s some more from the CNN commentary:
The global monetary system and the dollar will be discussed this weekend as finance officials from the Group of 20 economies gather in Washington for the spring meetings of the International Monetary Fund and the World Bank. The dollar found some support Friday as investors turned cautious ahead of possible policy changes stemming from this weekend’s summit. “Today’s risk will come from sideline comments from the G20 and IMF meetings as well as the deluge of U.S. data,” said Camilla Sutton, chief currency strategist at Scotia Capital. Investors are also focused on the outlook for global interest rates, as central banks adjust to rising inflation.
We wrote yesterday about the orchestration of world events when it comes to the BRICS, and how orchestrated this economic “threat” seems. We argued, hypothetically anyway, that the Western elites are still calling the shots and we would argue the same thing regarding the “dollar crisis.” The BRICS are working on their own version of a dollar replacement, one that’s perhaps gold-backed and the IMF is elaborating on SDRs.
It doesn’t take a genius to see that at some point an additional crisis can be manufactured for the express purpose of pressuring the two sides to sit down at the table together and merge their approaches into one single currency. We don’t know if the euro will be involved, or if perhaps the euro will be used to trigger a larger currency crisis but every time another article or white paper comes out on the issue, our suspicions are raised.
Conclusion: The IMF has been especially thorough with recent reports while cautioning that a replacement for the dollar is perhaps decades away. We used to believe that ourselves but these days we tend to believe the opposite of what elite institutions say. If the IMF is presenting the SDR as an alternative to the dollar “reluctantly,” then its institutional stance is more likely an eager one. And if such changes can only occur tectonically over decades then we would tend to speculate that they are more likely only years or even months away.
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April 20th, 2011 at 4:55 pm
I love the Daily Bell, thanks for mirroring the site. We must all stick together.
BTW, Kudos to you and Brandon Smith, I am with you 1000%!
April 20th, 2011 at 7:11 pm
same here!i will be passing brandon flier that he printed out to the local tea party and friends and fliers, all are interested, salute brother don
April 20th, 2011 at 11:41 pm
Yes, the two sites I hit first every day are the Oath Keepers and the Daily Bell.
I really appreciate their style of venue, and the consciousness there is awesome.
I encourage anyone who liked the above article to also see Anthony Wile’s interview with James Jaeger of Matrixx Entertainment, the guy who loves to feature Ron Paul, G. Edward Griffin, Edwin Vieira, and others of stature in his movies. There is an idea by Nelson Hultberg carried in this interview with James Jaeger. Enjoy.
http://www.thedailybell.com/2096/James-Jaeger-on-His-Documentary-and-Nelson-Hultbergs-New-Freedom-Oriented-Political-Party.html
Salute!
Elias Alias
April 21st, 2011 at 7:05 am
The carry away from this bit of education is that we need to move on constitutional tender issues. Most legislative sessions are either out or nearly so. Your local constitutionalist, good man and true is back in his district and available for you to sit with. Bring him a copy of Dr. Greene’s bill downloaded from the Tenth Amendment Center website. See how he wants to approach it. Does he feel that the political temperament in your state is such that you can go for constitutional tender or should you do as Utah did and “allow” the use and then ramp it up to what Georgia and other states is attempting which is mandate banks to offer gold and silver as a medium? Ultimately constitutional tender must be incorporated in a state owned bank. See Bank of North Dakota and goggle Marilyn Barnewall’s pieces.This is the best path to strangle the Fed. The Fed is a subset of the IMF and will be path we take to becoming Argentina. We see lots of information here. DB is one of the very best sources. If you don’t act on the information, I don’t want to hear you cry or beg me for food.
April 22nd, 2011 at 9:33 pm
According to Politico, Romney recently told CNBC’s Larry Kudlow that he is not concerned about the Federal Reserve at all…:
“I think Ben Bernanke is a student of monetary policy; he’s doing as good a job as he thinks he can do,” Romney said when Kudlow asked what kind of job Bernanke is doing. “I’m not going to spend my time going after Ben Bernanke. I’m not going to spend my time focusing on the Federal Reserve.”
Great. Mitt Romney is probably the front runner for the presidential nomination of the Republican Wing of the ONE PARTY, Republican and Democrat PARTY. But what is new? The great conservative President Ronald Reagan appointed Alan Greenspan as Chairman of the Federal Reserve. And Mr. Greenspan served all of the Presidents up to President Obama. Benjamin Bernanke has served both Presidents Bush and Obama.
It seems to me that we should be blaming the puppet Presidents that we elect who appoint the Federal Reserve Chairmen. But then who are those who are actually pulling the puppet strings is the real question — they wield the real power, not “our” elected leaders.
I think that Mayer Amschel Bauer Rothschild of the European House of Rothschild probably knew what he was talking about in 1863: “Give me control of a nation’s money and I care not who makes it’s laws.”
The House of Rothschild had their representative, Paul Warburg, at Jekyll Island Resort in 1910 when the Federal Reserve System was brought into being by European and American bankers. (Global to start with)
But don’t worry the New York banks who control the Federal Reserve are taking care of us.
April 23rd, 2011 at 9:28 am
Andrew Jackson, a Southerner, and the seventh President of the United StateS, had this to say about bankers:
“You are a den of vipers, I intend to rout you out, and by the Eternal God I will rout you out! If the people only understood the rank injustice of our money and banking system there would be a revolution before morning.”
(And the Rothschilds were there when their agent Nicholas Biddie fought to defeat Andrew Jackson’s move to curtail the international bankers.)
President Jackson can be faulted for his many imperfections, but he understood the danger of bankers gaining control of the United StateS of America.
Andrew Jackson was not alone as shown by a statement of Thomas Jefferson:
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation and then deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from banks and restored to the people to whom it properly belongs.”
But those who created the Federal Reserve System were not stupid when they pawned off their system of control of the American people by naming “their” system, “Federal”. I can’t get over the power of words. You can sell ANYTHING with the right words.
To Constitutional government,
To those Americans who are one hundred percent loyal to America only,