Category Archives: U.S. Dollar

There is No Recovery – America Headed Towards a Revolution

Celente: Revolution next for U.S.

Gerald Celente – the most trusted name in trends – sits down for an exclusive interview with RT’s Anastasia Churkina to talk about what the future holds for America during and after the Great Recession, gives advice to Obama, and forecasts the unexpected.

Arising From the Ashes of the Financial Collapse – a New World Order

Bush Sr. on a New World Order

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A year after financial crisis, a new world order emerges

One year after the near collapse of the global financial system, this much is clear: The financial world as we knew it is over, and something new is rising from its ashes.

Historians will look to September 2008 as a watershed for the U.S. economy.

On Sept. 7 , the government seized mortgage titans Fannie Mae and Freddie Mac . Eight days later, investment bank Lehman Brothers filed for bankruptcy, sparking a global financial panic that threatened to topple blue-chip financial institutions around the world. In the several months that followed, governments from Washington to Beijing responded with unprecedented intervention into financial markets and across their economies, seeking to stop the wreckage and stem the damage.

One year later, the easy-money system that financed the boom era from the 1980s until a year ago is smashed. Once-ravenous U.S. consumers are saving money and paying down debt. Banks are building reserves and hoarding cash. And governments are fashioning a new global financial order.

Congress and the Obama administration have lost faith in self-regulated markets. Together, they’re writing the most sweeping new regulations over finance since the Great Depression. And in this ever-more-connected global economy, Washington is working with its partners through the G-20 group of nations to develop worldwide rules to govern finance.

“Our objective is to design an economic framework where we’re going to have a more balanced pattern of growth globally, less reliant on a buildup of unsustainable borrowing . . . and not just here, but around the world,” said Treasury Secretary Timothy Geithner . Full Story

World Wants to Divorce Itself From U.S. Dollar

“US is on the slippery slope to economic collapse”

The Demise of the Dollar

UN dollar to replace US dollar?

UN Says New Currency Is Needed to Fix Broken ‘Confidence Game’

The dollar’s role in international trade should be reduced by establishing a new currency to protect emerging markets from the “confidence game” of financial speculation, the United Nations said.

UN countries should agree on the creation of a global reserve bank to issue the currency and to monitor the national exchange rates of its members, the Geneva-based UN Conference on Trade and Development said today in a report.

China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency after the financial crisis sparked by the collapse of the U.S. mortgage market led to the worst global recession since World War II. China, the world’s largest holder of dollar reserves, said a supranational currency such as the International Monetary Fund’s special drawing rights, or SDRs, may add stability.

“There’s a much better chance of achieving a stable pattern of exchange rates in a multilaterally-agreed framework for exchange-rate management,” Heiner Flassbeck, co-author of the report and a UNCTAD director, said in an interview from Geneva. “An initiative equivalent to Bretton Woods or the European Monetary System is needed.”

The 1944 Bretton Woods agreement created the modern global economic system and institutions including the IMF and World Bank.

Enhanced SDRs

While it would be desirable to strengthen SDRs, a unit of account based on a basket of currencies, it wouldn’t be enough to aid emerging markets most in need of liquidity, said Flassbeck, a former German deputy finance minister who worked in 1997-1998 with then U.S. Deputy Treasury Secretary Lawrence Summers to contain the Asian financial crisis.

Emerging-market countries are underrepresented at the IMF, hindering the effectiveness of enhanced SDR allocations, the UN said. An organization should be created to manage real exchange rates between countries measured by purchasing power and adjusted to inflation differentials and development levels, it said.

“The most important lesson of the global crisis is that financial markets don’t get prices right,” Flassbeck said. “Governments are being tempted by the resulting confidence game catering to financial-market participants who have shown they’re inept at assessing risk.”

The 45-year-old UN group, run by former World Trade Organization chief Supachai Panitchpakdi, “promotes integration of developing countries in the world economy,” according to its Web site. Emerging-market nations should consider restricting capital mobility until a new system is in place, the group said.

The world body began issuing warnings in 2006 about financial imbalances leading to a global recession.

The Dollar Collapses

Hastening the Bankruptcy of the US Financial-Military World Order

Washington is unable to call all the shots

dollar

Keen observers of America, if not effective managers of their own economies, these countries argue that the root of the global financial crisis is that the US makes too little and spends too much.

Challenging the American empire will be the focus of meetings in Yekaterinburg, Russia, today and tomorrow for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other leaders of the six-nation Shanghai Co-operation Organisation. The alliance comprises Russia, China, Kazakhstan, Tajiki-stan, Kyrgyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia.

The attendees (who will be joined on Tuesday by Brazil for trade discussions) have assured American diplomats that dismantling the US financial and military hegemony is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the US or for the dollar as a vehicle for trade among these countries.

The meeting is an opportunity for China, Russia and India to “build an increasingly multipolar world order”, as Mr Medvedev put it in a St Petersburg speech this month. What he meant was this: we have reached our limit in subsidising the US military encirclement of Eurasia while also allowing the US to appropriate our exports, companies and real estate in exchange for paper money of questionable worth.

An “artificially maintained unipolar system”, Mr Medvedev said, was based on “one big centre of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks”. Full Story

Borrowing and Spending: The Way to Hell

Geithner’s global dilemma

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Proposal of a New Reserve Currency Controlled by the IMF

Proposal of a New Reserve Currency Controlled by the IMF

China challenges power of the dollar as it flexes its economic muscles

China yesterday threw down a challenge to America’s 50-year dominance of the global economy as it proposed replacing the dollar as the world’s main reserve currency with a new global system under the control of the International Monetary Fund.

In a muscle-flexing move that will be seen as an attempt to exploit the big shifts in economic power created by the recession sweeping the West, Beijing said that the dollar’s role could eventually be taken over by the IMF’s so-called Special Drawing Right (SDR), a quasi-currency that was created in 1969.

The audacious proposal emerged in a speech by Zhou Xiaochuan, Governor of the People’s Bank of China, published on the central bank’s website. Unusually, the remarks were released in English as well as Chinese, emphasising China’s dissatisfaction with the global primacy of the dollar.

However, the comments high-lighted China’s growing confidence in its place at the high table of the world’s most important economies, as much as any real expectation that such an unusual suggestion would gain traction. They came with little more than a week left until leaders of the world’s most powerful economies meet at the G20 London summit. Full Story

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Who is the IMF?

from: 50 Years is Enough

The misery, marginalization, and impoverishment forced on millions by the International Monetary Fund and World Bank is unacceptable and renders them illegitimate.

The IMF and World Bank are controlled by rich imperialist countries in corrupt complicity with national elites all over the world. They claim to lead the fight against poverty, but their role as global loan sharks; their cruel imposition of privatization, cuts to social services, and free trade policies; their funding for environmentally disastrous projects; their secrecy and undemocratic decision making processes, make them an enemy of the people worldwide.

Today, these two institutions are on the defensive. Venezuela, Bolivia, and Ecuador are in open revolt against the IMF and World Bank. South African shantytown dwellers are fighting water privatization; Korean workers are striking against “free trade” agreements; and thousands of people successfully blockaded the G8 meeting in Germany earlier this year.

In the U.S., in the heart of empire, millions are struggling against the oppressive system of capitalism for dignity, autonomy and solidarity. Tens of thousands gathered for the first ever United States Social Forum; millions of immigrants have marched for their rights; and in Washington DC,in the belly of the beast, residents are organizing against the policies of gentrification and displacement.

The Grassroots Guide to the IMF and the World Bank (sample from book)

The World Bank (WB) & The International Monetary Fund (IMF)

With Obama’s Plan, America Will Go Bankrupt

US president battles criticism and recession

GOP predicts doomsday if Obama budget passed

Congressional Republicans on Sunday predicted a doomsday scenario of crushing debt and eventual federal bankruptcy if President Barack Obama’s massive spending blueprint wins passage.

But a White House adviser dismissed the negative assessments, saying she is “incredibly confident” that the president’s policies will “do the job” for the economy.

In a TV interview, Obama himself laughed when discussing the dire state of parts of the economy — and ascribed his laughter to “gallows humor.”

White House Council of Economic Advisers chairwoman Christina Romer insisted that the nation’s flailing economy will be rebounding by 2010.
Administration officials — and the president himself — have taken a cheerier tone despite economic indicators that are anything but positive.

“I have every expectation, as do private forecasters, that we will bottom out this year and actually be growing again by the end of the year,” Romer said.

The president, in an interview that aired Sunday on CBS News’ “60 Minutes,” talked about the need to spend taxpayer money to save financial firms and the auto industry.

“I just want to say that the only thing less popular than putting money into banks is putting money into the auto industry,” Obama said with a laugh. Full Story

Mortgaging Our Children and Grandchildren’s Future

The Outstanding Public Debt as of 21 Mar 2009 at 04:13:14 AM GMT

The Outstanding Public Debt as of 21 Mar 2009 at 04:13:14 AM GMT

Obama budget could bring $9.3 trillion in deficits

President Barack Obama’s budget would produce $9.3 trillion in deficits over the next decade, more than four times the deficits of Republican George W. Bush’s presidency, congressional auditors said Friday.

The new Congressional Budget Office figures offered a far more dire outlook for Obama’s budget than the new administration predicted just last month — a deficit $2.3 trillion worse. It’s a prospect even the president’s own budget director called unsustainable.

In his White House run, Obama assailed the economic policies of his predecessor, but the eye-popping deficit numbers threaten to swamp his ambitious agenda of overhauling health care, exploring new energy sources and enacting scores of domestic programs.

The dismal deficit figures, if they prove to be accurate, inevitably raise the prospect that Obama and his Democratic allies controlling Congress would have to consider raising taxes after the recession ends or else pare back his agenda.

By CBO’s calculation, Obama’s budget would generate deficits averaging almost $1 trillion a year of red ink over 2010-2019.

Full Story

‘Torrent of Pure, Undiluted, Inflation’

The Mother of All Bells

There is an old adage on Wall Street that no one rings a bell at major market tops or bottoms. That may be true in normal times, but as many have noticed, we are now completely through the looking glass. In this parallel reality, Ben Bernanke has just rung the loudest bell ever heard in the foreign exchange and government debt markets. Investors who ignore the clanging do so at their own peril. The bell’s reverberations will be felt by everyday Americans, whose lives are about to change in ways few can imagine. While nearly every facet of America’s economy has been devastated over the past six months, our national currency has thus far skipped through the carnage with nary a scratch. Ironically, the U.S dollar has been the beneficiary of the global economic crises which the United States set in motion. As a result, our economy has thus far been spared the full force of the storm.

This week the Federal Reserve finally made clear what should have been obvious for some time – the only weapon that the Fed is willing to use to fight the economic downturn is a continuing torrent of pure, undiluted, inflation. The announcement should be seen as a game changer that redirects the fury of the financial storm directly onto our shores.

In its statement, the Fed announced its intention to purchase an additional $1 trillion worth of U.S. treasury and agency debt. The purchases, of course, will be made with money created out of thin air through the Fed’s printing presses. Few can doubt that they will persist with these operations until the economy returns to its former health. Whether or not this can ever be accomplished with a printing press alone has never been seriously considered. Bernanke himself admits that we are in uncharted waters, with no map or compass, just simply a hope that more dollars are the answer. Full Story

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Printing Money Out of Thin Air = Hyperinflation