A United Nations panel is about to recommend that the world abandon the dollar as the world’s reserve currency, according to a Reuters report. Next week, the UN will propose that the dollar be replaced with a “shared basket of currencies” similar to the old Ecu (European Currency Unit) of the former European Community (the predecessor to the European Union), which was replaced at parity by the euro in 1999. According to Avinash Persaud, a member of the UN panel, now “is a good moment to move to a shared reserve currency."
If there were any lingering doubts as to where the Federal Reserve’s expansive monetary policies are leading, they were dispelled by yesterday’s shocking announcement that the Fed intends to purchase more than $1 trillion in additional debt, which it will pay for by printing new money.
Economists have long used 1920s Germany as the classic example of what can happen to a nation when monetary inflation gets out of control. So rapid was the inflation of the money supply that the exchange rate went from 60 marks per U.S. dollar during the first half of 1921 to 8,000 marks per dollar by December 1922.
All of the feigned outrage in Washington over the millions that AIG has been doling out in bonus payments, and the tens of billions in bailout monies that it sent directly to major creditors, fails to impress. Beyond the smokescreen of How-dare-they’s, emanating from Republican congressmen and the Obama administration alike, loom larger questions which no one seems willing to ask: how dare our elected leaders give almost $200 billion taxpayers’ dollars to AIG in the first place? And how dare they presume to nationalize a private company like some two-bit cadre of Marxist putschists?
President Barack Obama has just recently released his $3.55 trillion fiscal 2010 budget, and already there's full employment among all the people who matter to officials in Washington, D.C. A front-page story for the March 2 Washington Post began: "President Obama's budget is so ambitious, with vast new spending on health care, energy independence, education and services for veterans, that experts say he probably will need to hire tens of thousands of new federal government workers to realize his goals."