Russia and China have been signaling for months that they were concerned about the dollar as the reserve currency and our government’s level of debt, but now they think they should have some say in our internal monetary policy. Considering how far down the globalists’ garden path we have been led, they might just get their wish soon.
(Reuters) – Russia sided with China ahead of the Group of 20 summit, saying on Monday the United States should consult other countries before pumping cash into its economy, but stopped short of calling the policy a mistake.
President Dmitry Medvedev will take part in the summit, where conflict is brewing over the U.S. Federal Reserve’s latest allocation of $600 billion to buy Treasury bonds — money that investors are likely to redirect into emerging markets in search of higher returns, potentially fuelling new asset bubbles.
“Russia’s President (Dmitry Medvedev) will insist …. that such actions are taken with preliminary consultations with other members of (the Group of 20 countries),” said Russian G20 negotiator Arkady Dvorkovich.
China has been particularly vocal in criticism of the policy, which U.S. President Barack Obama defended on Monday during a trip to India, saying the Fed’s mandate to grow the U.S. economy was good for the world as a whole.
Dvorkovich said that the Fed’s policy was an internal matter but added that previous decisions by the G20 require consultations on such issues. He said the Fed’s move may even benefit Russia because its current capital inflows were too small.
This is what happens when a country, insanely, allows a central bank to run their economy and dictate monetary policy, AND THEN that private banking cartel joins the rest of the central banks around the world (Bank Of International Settlements, World Bank, IMF). The steady, progressive march toward the loss of American sovereignty.
Remember, the Board of Governors of the Federal Reserve cannot be impeached, the Federal Reserve doesn’t EVER open it’s books, and they can set monetary policy without so much as a ‘by your leave’ from the president or Congress. Do you want the G20 guiding the Federal Reserve, an unelected body, on what America’s monetary policy is? I’m really looking forward to that after the rape and pillage done by Wall Street, aren’t you?
I personally am enjoying watching Ben Bernanke pull an ‘Obama’ by so far overreaching with QE2 that it will force Americans to LOOK at the Federal Reserve the same way we have been looking at the Dems and Pubs, and hopefully ignite the momentum to abolish the Fed and have a constitutional amendment passed forbidding central banks from operating in this country.
As Ron Paul stated this morning: ‘Fed Will ‘Self Destruct’ as Easing Kills the Dollar’. We can only hope and pray that these leeches will be removed from office, charged, prosecuted and incarcerated. Bennie and InkJets first.
The imminent approach of the G20 meeting in London on April 2nd should produce some fireworks considering all the talk about a super-reserve currency, and now, a new global reserve currency put forth by Russia and China. Hmmm…Russia and China calling for a new global currency. Something about that just seems a bit hinky. If you are one of those readers that feel like the economists are talking over your heads, I want to help break it down and make it more manageable. You NEED to understand what has happened and what is happening right now.
For those of you that are not up on this particular topic, a few definitions, (you knew that was coming), are in order:
G20 Major Economies:
The G-20 (more formally, the Group of Twenty Finance Ministers and Central Bank Governors) is a group of finance ministers and central bank governors from 20 economies: 19 of the world’s largest national economies, plus the European Union (EU). It also met once at heads-of-government level, in November 2008. Collectively, the G-20 economies comprise 85% of global gross national product, 80% of world trade (including EU intra-trade) and two-thirds of the world population.
The G-20 is a forum for cooperation and consultation on matters pertaining to the international financial system. It studies, reviews, and promotes discussion among key industrial and emerging market countries of policy issues pertaining to the promotion of international financial stability, and seeks to address issues that go beyond the responsibilities of any one organization. Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States.
International Monetary Fund:
The International Monetary Fund (IMF) is an international organization that oversees the global financial system by following the macroeconomic policies of its member countries, in particular those with an impact on exchange rates and the balance of payments. It is an organization formed to stabilize international exchange rates and facilitate development. It also offers financial and technical assistance to its members, making it an international lender of last resort. Its headquarters are located in Washington, D.C., USA.
The International Monetary Fund was created in 1944 , with a goal to stabilize exchange rates and assist the reconstruction of the world’s international payment system. Countries contributed to a pool which could be borrowed from, on a temporary basis, by countries with payment imbalances. (Condon, 2007)
The IMF describes itself as “an organisation of 185 countries (Montenegro being the 185th, as of January 18, 2007), working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty”. With the exception of Taiwan, North Korea, Cuba, Andorra, Monaco, Liechtenstein, Tuvalu, and Nauru, all UN member states participate directly in the IMF. Most are represented by other member states on a 24-member Executive Board but all member countries belong to the IMF’s Board of Governors.
The World Bank is an international financial institution that provides financial and technical assistance to developing countries for development programs (e.g. bridges, roads, schools, etc.) with the stated goal of reducing poverty.
The World Bank differs from the World Bank Group, in that the World Bank comprises only two institutions:
Whereas the latter incorporates these two in addition to three more:
The President of the Bank, currently Robert B. Zoellick, is responsible for chairing the meetings of the Boards of Directors and for overall management of the Bank. Traditionally, the Bank President has always been a U.S. citizen nominated by the President of the United States, the largest shareholder in the bank. The nominee is subject to confirmation by the Board of Governors, to serve for a five-year, renewable term. (emphasis mine)
Mr. Zoellick is a CFR member, as is Timothy Geithner and most of the people surrounding B. Hussein Obama.
And my personal favorite that I am sure a few of you have heard about by now:
Commission of Experts of the President of the United
Nations General Assembly on Reforms of the International Monetary and
Here is a snippet from their most current recommendations on March 19th, 2009, to the United Nations:
1. A New Global Reserve System
47. The global imbalances which played an important role in this crisis can only be addressed if there is a better way of dealing with international economic risks facing countries than the current system of accumulating international reserves. Indeed, the magnitude of this crisis and the inadequacy of international responses may motivate even further accumulations. Inappropriate responses by some international economic institutions in previous economic crises have contributed to the problem, making reforms of the kind described here all the more essential. To resolve this problem a new Global Reserve System—what may be viewed as a greatly expanded SDR, with regular or cyclically adjusted emissions calibrated to the size of reserve accumulations—could contribute to global stability, economic strength, and global equity. Currently, poor countries are lending to the rich reserve countries at low interest rates. The dangers of a single-country reserve system have long been recognized, as the accumulation of debt undermines confidence and stability. But a two (or three) country reserve system, to which the world seems to be moving, may
be equally unstable. The new Global Reserve System is feasible, non-inflationary, and could be easily implemented, including in ways which mitigate the difficulties caused by asymmetric adjustment between surplus and deficit countries.
2. Reforms of the Governance of the International Financial Institutions
48. There is a growing international consensus in support of reform of the governance, accountability, and transparency in the Bretton Woods Institutions and other nonrepresentative institutions that have come to play a role in the global financial system, such as the Bank for International Settlements, its various Committees, and the Financial Stability Forum. These deficiencies have impaired the ability of these institutions to take adequate actions to prevent and respond to the crisis, and have
meant that some of the policies and standards that they have adopted or recommended
disadvantage developing countries and emerging market economies. Major reforms in the governance of these institutions, including those giving greater voice to developing countries and greater transparency are thus necessary.
49. The reform of the World Bank’s governance structure should be completed swiftly. For the second stage of the reform, focussing on the realignment of shares, three criteria could be taken into account: economic weight, contribution to the development mandate of the World Bank (for example, measured in terms of contributions to IDA and trust funds), and the volume of borrowing from the Bank.
50. For the IMF, serious consideration should be given to restoration of the weight of basic votes and the introduction of double or multiple majority voting.
51. Elections of the leaders of the World Bank and the International Monetary Fund should take place under an open democratic process.
I wonder how the Council on Foreign Relations that has appeared to be the front man for the world central bankers are going to like losing control of the World Bank?
Which brings us to the current situation of Russia, China and TurboTax Timmie all thinking that maybe it might be a good idea.
China is calling for a new global currency controlled by the International Monetary Fund, stepping up pressure ahead of a London summit of global leaders for changes to a financial system dominated by the U.S. dollar and Western governments.
The comments, in an essay by the Chinese central bank governor released late Monday, reflects Beijing’s growing assertiveness in economic affairs. China is expected to press for developing countries to have a bigger say in finance when leaders of the Group of 20 major economies meet April 2 in London to discuss the global crisis.
A reserve currency is the unit in which a government holds its reserves. But Zhou said the proposed new currency also should be used for trade, investment, pricing commodities and corporate bookkeeping.
Beijing has long been uneasy about relying on the dollar for the bulk of its trade and to store foreign reserves. Premier Wen Jiabao publicly appealed to Washington this month to avoid any steps in response to the crisis that might erode the value of the dollar and Beijing’s estimated $1 trillion holdings in Treasuries and other U.S. government debt.
The currency should be based on shares in the IMF held by its 185 member nations, known as special drawing rights, or SDRs, the essay said. The Washington-based IMF advises governments on economic policy and lends money to help with balance-of-payments problems.
Then we all know TurboTax Timmie being open to a new currency and then “clarifying his statement” as the value of the dollar dropped 1.2%. Even I, with no college education would KNOW not to make that mistake, unless I was TRYING to tank the dollar.
FXstreet.com (Barcelona) – The Dollar has shaken strongly across the board after the U.S. Treasury Secretary, Timothy Geithner, affirmed he was open to consider China’s idea of moving towards an Special Drawing Right (SDR) linked currency system. The USD has reached new session low against JPY, EUR and GBP, against CHF, the Dollar has reached the 1.1165 important support.
Geithner said he was open to considering expanding an SDR although he admitted not even reading China’s proposal yet. Furthermore, he added that the dollar’s future role will be determined by good U.S. policy.
WHAT IS IT WITH NOT READING IMPORTANT DOCUMENTS?
And to be fair, here is the clarifying (with bold emphasis mine.)
On a day when the dollar had every right to rally given surprisingly upbeat U.S. economic data, Treasury Secretary Timothy F. Geithner briefly knocked the greenback for a loop.
From Bloomberg News:
Geithner was initially asked at a Council on Foreign Relations event in New York about proposals from People’s Bank of China Gov. Zhou Xiaochuan for a new international reserve currency. Geithner said, “As I understand his proposal, it’s a proposal designed to increase the use of the International Monetary Fund’s ‘special drawing rights.’ And we’re actually quite open to that.”
Some currency traders suddenly choked, reading into Geithner’s comments that the U.S. was “open to” the idea of a new currency that might someday usurp the dollar’s role as the preeminent holding of governments and institutional investors worldwide.
Within minutes of Geithner’s remarks, the dollar slid. The DXY index, which tracks the dollar’s value against six major currencies, fell 1.2% before stabilizing and creeping back up. The euro surged to $1.365 from $1.345.
Roger Altman, who worked with Geithner as deputy Treasury secretary in the Clinton administration, later asked Geithner whether he wanted to “clarify” his remarks.
“I’d like to ask one final question, in effect on behalf of the market,” said Altman, founder of Evercore Partners Inc. “Let me ask the question this way: Do you see any change over the foreseeable future in the basic role of the dollar as the world’s key reserve currency?”
Geithner responded by saying that “I think the dollar remains the world’s dominant reserve currency.”
So ladies and gentlemen; get ready for more and ever increasing amounts of stupidity coming our way….have you taken measures to keep your families safe and fed in the months ahead?
I am still working on a post that gives a timeline of what the G20 has been up to, but had to put this up ASAP because this will mean the end of the dollar if it happens. Also note, this is what the G20 has been talking about since last November, and the forthcoming post will be about the “super-reserve” currency now being chatted up.
China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.
In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.
Analysts said the proposal was an indication of Beijing’s fears that actions being taken to save the domestic US economy would have a negative impact on China.
“This is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money,” said Qu Hongbin, chief China economist for HSBC.
Although Mr Zhou did not mention the US dollar, the essay gave a pointed critique of the current dollar-dominated monetary system.
“The outbreak of the [current] crisis and its spillover to the entire world reflected the inherent vulnerabilities and systemic risks in the existing international monetary system,” Mr Zhou wrote.
China has little choice but to hold the bulk of its $2,000bn of foreign exchange reserves in US dollars, and this is unlikely to change in the near future.
To replace the current system, Mr Zhou suggested expanding the role of special drawing rights, which were introduced by the IMF in 1969 to support the Bretton Woods fixed exchange rate regime but became less relevant once that collapsed in the 1970s.
Today, the value of SDRs is based on a basket of four currencies – the US dollar, yen, euro and sterling – and they are used largely as a unit of account by the IMF and some other international organisations.