Friday, 22 May 2009

Dumping the Dollar for Global Currency

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dollarsWill the Obama spend-a-rama finish off the dollar as the world's reserve currency? It well may, and sooner than most people think. Any day now we may wake up to headlines announcing that the International Monetary Fund's SDR (Special Drawing Rights) is being adopted as the new global currency.

That, of course, was the revolutionary plan adopted by the finance ministers, central bankers, and heads of state at the London G20 Summit in April. But you didn't read about it in the financial pages or see it reported in the extensive (surface) coverage of the summit meeting. One of the few reporters to reveal the real news of the conference was Ambrose Evans-Pritchard of Britain's Telegraph.

The headline of his April 7 report read, "The G20 moves the world a step closer to a global currency," while the subtitle ominously told the rest of the story: "The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity."

Evans-Pritchard expounds with these details:

A single clause in Point 19 of the communiqué issued by the G20 leaders amounts to revolution in the global financial order. "We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity," it said. SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.

In effect, the G20 leaders have activated the IMF's power to create money and begin global "quantitative easing." In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it.

Three weeks after the G20 confab, on April 25, following the IMF's annual spring meeting in Washington, D.C., IMF Managing Director Dominique Strauss-Kahn announced the IMF would begin selling bonds as a way to raise additional funds, ostensibly to lend to struggling nations. Although issuing bonds has been discussed previously, the IMF has never before taken such a step.

China, Brazil, Russia, and other countries have been pushing this "solution" for the past several months, and we can expect the anointed financial gurus to begin churning this idea ever more frequently to prep opinion molders for the planned currency switcheroo.

Thus, we see articles appearing such as this one entitled, "The dollar's last days as the dominant reserve currency?" by Onno Wijnholds on May 20 in the European Voice. Now, J. Onno de Beaufort Wijnholds is far from being a household name, but in the rarefied atmosphere of global finance, the Dutchman is well known. A former executive director of the International Monetary Fund and a former permanent representative of the European Central Bank in the United States, he is a regular at the concalves of the financial elites. Wijnholds writes:

Zhou Xiaochuan, the governor of the People's Bank of China, recently suggested that replacing the dollar with the International Monetary Fund's (IMF) special drawing rights (SDR) as the dominant reserve currency would bring greater stability to the global financial system.

The idea of a supranational reserve currency is also, it appears, supported by Russia and other emerging markets. And a United Nations advisory committee has argued for a new global reserve currency, possibly one based on the SDR.

Somewhat quicker out of the gate was C. Fred Bergsten, director of the Peterson Institute for International Economics. Bergsten, a protégé of Henry Kissinger, was a Treasury official in the Carter administration and a senior fellow at Brookings, the Carnegie Endowment, and the Council on Foreign Relations. On April 8, the Financial Times ran an op-ed by Bergsten entitled, "We Should Listen to Beijing's Currency Idea." In it, he wrote:

Zhou Xiaochuan, governor of China's central bank, has suggested creating a "super-sovereign reserve currency" to replace the dollar over the long run. He would sharply enhance the global role of special drawing rights (SDRs), the international asset created by the International Monetary Fund (IMF) in the late 1960s and just given an enormous boost by the decision of the Group of 20 to expand its issuance by $250 billion (€189 billion, £171 billion). These are the first big proposals for international monetary reform from China or indeed any emerging-market economy and deserve to be taken seriously for that reason alone.

Several other Asian countries, Brazil, and Russia have expressed support for Mr. Zhou's ideas. The United States and several other governments, however, have been quick to reject them, reaffirming their confidence in the central global role of the dollar.

However, while Bergsten, Wijnhold, and other globalists refer to the move toward the SDR global currency as Beijing's idea, that is more than a bit disingenuous. In truth, as Bergsten admits later on in his op-ed, the communist economists in Beijing merely adopted the proposal as he had put it forward in the Financial Times back in December of 2007 ("How to Solve the Problem of the Dollar").

Even that admission, though, concealed the fact that Bergsten has been pushing for global economic management by elites for decades. Twenty years ago, in a 1989 interview with the Christian Science Monitor, Bergsten asserted: "The world economy is in trouble unless there is some central steering mechanism." And in his articles, speeches, and books, he has made it plain that he and his fellow "wise men" should be entrusted with that steering.

One of those fellow globalist elites is Richard N. Cooper Maurits C. Boas, professor of international economics at Harvard, like  Bergsten a former high-level Treasury official, and a leading light in the CFR brain trust. In a 1984 piece for the CFR journal Foreign Affairs entitled "A Monetary System for the Future," Dr. Cooper baldly proclaimed:

I suggest a radical alternative scheme for the next century: the creation of a common currency for all of the industrial democracies, with a common monetary policy and a joint Bank of Issue to determine that monetary policy.

Cooper went on to acknowledge that "a single currency is possible only if there is in effect a single monetary policy, and a single authority issuing the currency and directing the monetary policy."

"How can independent states accomplish that?" he asked rhetorically. Naturally, he had the answer: "They need to turn over the determination of monetary policy to a supranational body." The IMF.

Global monetary control, as proposed by Cooper, Bergsten, Zhou Xiaochuan, et al.,  would lead rapidly and ineluctably to global political control: world government. Is that the plan behind the rush to destroy what's left of the dollar's value? It certainly seems so to this writer.

Related articles:

Global Fusion: The G20, IMF, and World Government

G20 Pledges Supersized IMF

"Conspiracy Theorists" Not So Crazy After All

Global-currency Call Gets Nod From Geithner, Others

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