World bids farewell to U.S. dollar

freedomclub SG

World bids farewell to U.S. dollar

Largest bank, U.N. seek replacement for global reserve currency

Posted: September 25, 2009
12:50 am Eastern

http://www.wnd.com/index.php?fa=PAGE.view&pageId=110913

By Jerome Corsi and Chelsea Schilling
© 2009 WorldNetDaily

One of the world's largest banks is bidding farewell to the U.S. dollar – just as the dollar faces intense scrutiny at today's G-20 summit and the United Nations announces it wants a new global reserve currency replacement.

"The dollar looks awfully like sterling after the First World War," David Bloom, HSBC currency chief, told London's Telegraph.

"The whole picture of risk-reward for emerging market currencies has changed. It is not so much that they have risen to our standards, it is that we have fallen to theirs. It used to be that sovereign risk was mainly an emerging market issue but the events of the last year have shown that this is no longer the case. Look at the U.K. – debt is racing up to 100 percent of GDP," he said

China and rising Asia can no longer continue holding down their currencies to boost exports because it's hurting their own economies, creating asset bubbles, the Telegraph reported.

"The policy headache was already becoming clear in the final phase of the global credit boom but the financial crisis temporarily masked the effect," the report states. "The pressures will return with a vengeance as these countries roar back to life, leaving the U.S. and other laggards of the old world far behind."

Bloom told the newspaper that regional currencies will emerge as the anchor for HSBC's smaller trading partners, with China, Brazil, or South Africa filling the role of the U.S. Australia has been linking its fortunes to China through commodity ties.

The news comes on the heels of a recent Red Alert report that world organizations, including the United Nations, are openly calling for the creation of a one-world currency to replace the dollar – and the Obama administration's trillion-dollar deficits are serving as a trigger for the currency switch.

A United Nations report recommended that a new one-world currency should be created to replace the dollar as the standard for foreign-exchange holdings in international trade.

"If the plan succeeds, the United Nations would effectively end up replacing the United States as the issuer of the one-world international currency used as the standard of foreign exchange to settle international trade transactions," Red Alert reported. "The move would obviate the need for any nation state in the future to be the arbiter of world trade, marking yet another blow to national sovereignty on the path to one-world government."

The report, released by the United Nations Conference on Trade and Development, or UNCTAD, endorsed a proposal that Special Drawing Rights, or SDRs, issued by the International Monetary Fund, or IMF, "could be used to settle international payments."

The dollar is also expected to come under intense scrutiny at today's G-20 Pittsburgh summit. China is leading calls for reconsideration of the dollar as a reserve currency. The country was first to call for a new global currency as an alternative to the dollar as the U.S. deficit began multiplying.

Red Alert has also reported that Russia and China championed the idea to use the IMF's Special Drawing Rights as a new international currency as a proposal that was adopted by the 2009 G-20 London summit held last April.

The G20 summit meeting took a step toward creating a new one-world currency through the International Monetary Fund that is designed to replace the dollar as the world's foreign exchange reserve currency of choice.

Point 19 of the final communiqué from the G20 summit in London on April 2 stated, "We have agreed to support a general SDR which will inject $250 billion into the world economy and increase global liquidity," taking the first steps forward to implement China's proposal that Special Drawing Rights at the International Monetary Fund should be created as a foreign-exchange currency to replace the dollar.

The IMF created SDRs in 1969 to support the Bretton Woods fixed exchange-rate system.

"The international supply of two key reserve assets – gold and the U.S. dollar – proved inadequate for supporting the expansion of world trade and financial development that was taking place," a document on the IMF website explains. "Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF."

When the Bretton Woods fixed-rate system collapsed, major world currencies, including the dollar, shifted to a floating exchange-rate system where the price of the dollar and other major world currencies was created by trading on international currency exchanges.

Until the current global economic crisis, SDRs issued by the IMF have been used by IMF member nation states primarily as a reserve account to support international trade transactions, not as an alternative international currency available to settle international debt transactions in danger of default.

Some say the discussion of using SDRs at the IMF as an international reserve payment system is further evidence that the momentum to create a one-world currency is gaining not only among academic economists, but also among professional economists holding prominent government positions.

Red Alert previously reported that strong support for the idea of a one-world currency has recently come from Canadian economist Robert Mundell, who won a Nobel-prize in 1999, for his work formulating the intellectual basis for creating the euro.

Mundell endorsed the idea of Kazakhstan President Nursultan Nazarbayev to create the "acmetal" as a world currency, according to the Australian News.

Craig Smith, president and CEO of Swiss America Trading Corporation, a national investment firm specializing in U.S. gold and silver coins, has been warning about the decline of the dollar for many years.

"It is now happening before our eyes," Smith said. "The dollar is getting ready to get hammered, and there is no way for the Fed to stop it."

Smith, author of "Rediscovering Gold in the 21st Century," has argued that the simplest solution for Americans looking to protect their wealth is to convert it from unstable dollars into gold, "the most stable currency in the world."

Babelfish SG

hmm.. if not US dollar, then which currency?

angel3070 SG

hmm.. if not US dollar, then which currency?

Mix of Dollar, EURO, Ruble, Yen, and Yuan.

angel3070 SG

Ron Paul Warns of Violence from Pending Dollar Crisis

http://www.lewrockwell.com/paul/paul588.html

http://timesofindia.indiatimes.com/news/business/international-business/Dollar-may-lose-role-as-worlds-predominant-currency-World-Bank-chief/articleshow/5066747.cms

http://www.cbc.ca/money/story/2009/10/02/jobs-data-september.html

Fryderyk HPH SG

hmm.. if not US dollar, then which currency?

I am pretty sure it would be the Swiss Franc. They peg it to their Swiss gold reserves.

Would be good if the Swiss Franc would be the new internationally pegged currency. It is also the most stable one, which many forex traders know.

cyberr1981 SG

why use another fiat currency to replace a failed fiat currency??

This is clearly a joke!!

I think we should use gold as reserve currency!

Fryderyk HPH SG

why use another fiat currency to replace a failed fiat currency??

This is clearly a joke!!

I think we should use gold as reserve currency!

Use a currency that is pegged to gold lah... Like the Swiss Franc.

Babelfish SG

I am pretty sure it would be the Swiss Franc. They peg it to their Swiss gold reserves.

Would be good if the Swiss Franc would be the new internationally pegged currency. It is also the most stable one, which many forex traders know.

Really? that sounds like a great idea. They made a good decision not to convert to Euro.. thats my own inference=)

youyayu SG

to those people that convert their money to USD in hope of it growing and earn a profit, must be chewing their furnitures now

freedomclub SG

hmm.. if not US dollar, then which currency?

Well, according to the UN, there should be a global currency to replace the US Dollar which immediately brings to mind a global form of economic governance.

Fryderyk HPH SG

Really? that sounds like a great idea. They made a good decision not to convert to Euro.. thats my own inference=)

The Swiss are very proud of their lifestyle. Seriously.

When Swissair collapsed in 2001 it sent shockwaves thruout the country that a Swiss corporation was allowed to fail.

Sunwukonga SG

If American's do a bull run on gold with their US dollars, then the US dollar will be absolutely worthless long before even a fraction of it has been converted. That's because the US dollar is not backed by gold at all, but by the 'integrity' of the US Government. Hence it is a Fiat currency, like most government controlled currencies in the world today. The last 'gold standard' currency of the US ended in 1933.

In 1972 the French government called the US government on their 'gold standard' and asked them to exchange the US dollars that the French had stockpiled up until that point with gold. The US refused. In fact, since the seventies the US dollar has been supported by another well known commodity. Oil, black gold. US interests were clever enough to initially broker deals with Saudi Arabia that required all oil to be sold in US dollars, effectively taxing the whole world for their use of oil.

Iraq was not attacked because it invaded Kuwait, but because Iraq first attacked the US hegemony by supplying oil to anyone, in any currency. That action threatened the US far better than an enemy nuclear submarine anchored off the east coast of America. The US is still in Iraq today.

Now Iran, Iraq's neighbour also sells oil to anyone in any currency, and the consequence is the destabilization of the Iranian regime. Coincidence? I think not.

The US dollar has been physically worthless for a long time, and only desperate measures have kept it afloat. These initial moves by the UN to introduce a global currency is a disaster, and is yet another stop gap measure introduced by the US administration to save themselves.

Governments should never control currencies. Currencies need to become independent and accountable to economic forces. Reject a global currency, and demand many independent currencies.

The best way to achieve this is to demand that your government allow the use of independent tenders in your country.

angel3070 SG

which immediately brings to mind a global form of economic governance.

How so? What is the reasoning?

Googooboyy SG

Good read Sunwukonga. Quite enlightening. A Global Currency... In whose interest?

Anyway, Here's a good option: revert to barter trading and start living in caves. J/k...

freedomclub SG

How so? What is the reasoning?

It was openly stated in the G-20 communique:

http://www.youtube.com/watch?v=7-boaN1BZfk