The Geopolitics of World War III

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Is This the End of the Petro-Dollar?

Ben Swann

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The Road to World War 3

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Globalists Push SDRs as World Reserve Currency

Once again the IMF is calling for SDRs, short for Special Drawing Rights, to replace the U.S. dollar as the world’s reserve currency.

“Over time, there may also be a role for the SDR to contribute to a more stable international monetary system,” said Dominique Strauss-Kahn, managing director of the IMF. He said there are some “technical hurdles” involved with SDRs, but he believes they could help correct global imbalances and shore up the global financial system.

In addition to creating a globalist fiat currency controlled by the financial elite and their central banks, the IMF is proposing the creation of SDR-denominated bonds, which would reduce the use of U.S. Treasuries if implemented. The IMF also suggested that assets such as oil and gold, which are currently traded in U.S. dollars, should be priced using SDRs.

The nominal value of an SDR is derived from a basket of currencies – specifically, a fixed amount of Japanese Yen, US Dollars, British Pounds and Euros. The IMF cooked up the SDR scheme in 1969. It was originally intended to be the primary asset held in foreign exchange reserves under Bretton Woods, but after the collapse of that system in the early 1970s – a victim of the bankster plan to send the U.S. deficit into the stratosphere – SDRs took on a far less important role.

Following the onset of the engineered global financial crisis in 2008, the so-called BRIC countries – Brazil, Russia, India and China – led primarily by Russia and China, have called for dumping the dollar and moving into a global currency scheme. The SDR facility stands ready.

The IMF and the globalists plan to elevate China and undermine the United States. Strauss-Kahn told reporters last June in a news briefing that he believed there would be more pressure to include yuan, also known as the renminbi, among SDR currencies.

Early in 2009, China issued an aggressive call to dump the dollar and move into SDRs. “The role of the SDR has not been put into full play due to limitations on its allocation and the scope of its uses. However, it serves as the light in the tunnel for the reform of the international monetary system,” saidZhou Xiaochuan, governor of the People’s Bank of China.

The IMF, however, has so far held off on spiking international foreign exchange reserve assets with the yuan. The problem is that China has yet to “liberalize” its currency, in other words the authoritarian state has yet to allow central banks to hold yuan-denominated deposits without restriction.

In June, the United Nations called for abandoning the U.S. dollar as the main global reserve currency, saying it has been unable to safeguard value.

“In politics, nothing happens by accident. If it happens, you can bet it was planned that way,” said Franklin D. Roosevelt.

Same thing can be said for economics. The banksters have purposely attacked the dollar in order to move us into a globalist world currency.

Federal Reserve operative and current U.S. Treasury boss Tim Geithner gave the SDR concept a nod during the globalist G20 confab in London. During the meeting, it was announced that the IMF would have a trillion dollars allocated to its coffers and an increase in the SDR facility of $250 billion.

The globalist plan to establish a world currency began in earnest after the Second World War when John Maynard Keynes and the British government proposed the “Bancor” as a world reserve currency or – as the globalists like to call it – a supranational currency. At the time, it was decided under Bretton Woods that the U.S. dollar would serve as the world’s reserve currency.

Keynes approach gained renewed favor among establishment economists and central banksters after the engineered financial crisis.

The Federal Reserve is facilitating the move into a world currency controlled by the IMF and the globalist central banks by quantitative easing, that is to say devaluing the U.S. dollar by cranking up the printing press.

As investor Marc Faber noted last year, this funny money intervention by the Federal Reserve is going to create a final crisis that will destroy the U.S. financial system. The Fed “will print and print and print until the final crisis wipes out the whole system,” Faber warned.

Following that engineered destruction, there will be desperate and hysterical calls to embrace the SDR scheme and adopt the globalist world economic order.

–

Kurt Nimmo edits Infowars.com. He is the author of Another Day in the Empire: Life In Neoconservative America.

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The Impact of Fiat Money as the World’s Reserve Currency

David Redick

Activist Post

The creation of fiat official government money has had a profound effect in history and on our nation and the world today. "Fiat" means it is worth whatever the government says it is (its face value), although the material of which it is made may have more or less intrinsic market value.  Examples would include both valuable silver dollars and worthless paper, each declared to be worth $1; and today’s American Eagle bullion coin with a face value of $50 for one ounce of gold. 

Normally, when a country creates too much fake money, sellers avoid it for payment, or stop buying its bonds due to its falling value, and the party is soon over. However, the U.S. is in a unique positionnever seen in the history of the world. Our fiat paper money is the primary de facto world’s "reserve currency" (anyone will accept it for payment and keep it as cash, or as a dollar-denominated asset; banks keep it as their reserves, like gold). We can create new money out of thin-air, and sellers of goods and services worldwide will accept it.   We can also pay our debts with it, even as the federal government spends to excess. 

We have abused the privileged status of the U.S. dollar in many immoral and counterproductive ways. It is the underlying cause of our major problems, such as jobs being exported due to excess imports of goods (other countries would run out of money; the U.S. can create more as needed!), strange banking and securities deals based on loose money, excess personal spending and debt, and wars. 

One cannot underestimate the importance of our ability to pay debts to other nations, and not be required to convert to their money. This conversion would normally trigger market valuation, which could collapse the value of the U.S. dollar.  Conversely, other nations must buy dollars to pay for most imports, and face declining exchange rates if they have expanded their money supply too much. We have abused this reserve status, and as of mid-2009 other nations started seeking alternatives (yuan, yen, a basket of currencies, etc.). 

Most people are not aware that the reserve currency is used for most payments between other nations; for example, India pays Brazil for coffee with U.S. dollars. Hence, all nations keep a supply of U.S. dollars to use in trade. All banks are required to have sufficient reserves in order to show a strong asset base for the bank’s obligations (mainly demand and time deposits). Since the USD has been valued by the world system to be "as good as gold," it is known as a reserve currency and used instead of gold to fund these bank reserves. The Dollar has been used in about 90% of international transactions since its ascendancy in the 1920s, but has become weaker since 2000, and declined to 70% or less by 2009. About 30% of international deals are now done in Euros and Yen, but that is increasing as the economies and currencies of China and others grow stronger. Indeed, China started using its yuan for international transactions in 2010, and also allowed foreign firms to create yuan-denominated private equity funds.

There have been a series of international agreements to manage currency. The International Monetary Fund (IMF) and World Bank were born of these deals. Both are counterproductive causes of spending and distortions (including feeding corrupt governments), and should be abolished along with the Federal Reserve. 

Redeemability was restricted more and more until the 1944 Bretton Woods agreement, which set rules to: 1) Allow only nations to redeem paper for gold between each other (not people; a form of the Gold Bullion Exchange standard).  2) Create the International Monetary Fund (IMF) to handle its transactions.  3) Set the USD as the world's official reserve currency, with a fixed value of $35 per ounce of gold. 

The US engaged in so much monetary expansion (inflation of the money supply) after WW2 it lost much of its value and flooded Europe with so-called Euro-dollars. France finally started demanding gold for most of their paper dollars, which peaked with De Gaulle’s famous press conference on Feb. 4, 1965 where he described the U.S. as having an "exorbitant privilege" as the world’s reserve currency, which allowed us to pay our debts with money created out of thin air!   De Gaulle said: 

There can be no other criterion, no other standard, than gold. Gold that never changes, that can be shaped into ingots, bars, coins . . . that has no nationality and that is eternally and universally accepted as the ultimate fiduciary value par excellence. 

France started redeeming their paper dollars to gold, but Nixon soon refused to remit gold to any nation (we were running out), and then abrogated Bretton Woods on Aug. 15, 1971, setting the dollar "afloat" with no redeemability. Within a few years, all nations had done the same, including conservative Switzerland. Whoopee! Everybody could make money out of thin air! 

The Fed destroys the value of our money by excess expansion of the money supply. Proof is shown in the start and end purchase power amounts below, which are from www.measuringworth.com:

It took $1,202.05 in the year 1912 for the same purchase power as $1,000 in the year 1774 (a 17.7% loss in 138 yrs, or 0.13 % per yr).

It took $22,427.40 in the year 2008 for the same purchase power as $1,000 in the year 1913 (a 95.5% loss in 95 yrs, or 1.0% per yr). Almost eight times worse than before the Fed!

A decline in purchasing power of the dollar, and thus price increases, always follow a rapid and excess (over 5% per year) increase in the money supply (monetary inflation). As shown below, the dollar has lost 95% of its value from 1913 (when the Fed started) to 2010, but 80% of that loss occurred after Nixon cut the Bretton Woods tie to gold in 1971, increasing the money supply even faster. Other factors, such as a reduced supply of goods and services, can cause price increases, but monetary inflation clearly has caused the most harm:

Source: Byron King, www.agorafinancial.com

The US dollar has lost over 95% of its purchasing power since 1913 due to excess monetary inflation by the Fed by creating new money to pay bills. This has been the main cause of the 2,000% increase in prices since 1913. Excess money creation prior to 1913 resulted in short-term inflation and panic runs on insolvent banks, but the Fed allowed long-term abuse by bailing-out such banks, which in turn caused the moral hazard of the banks taking excess risks by seeking casino profits for the last 97 years and counting!

A special monetary expansion event occurred in late 2008 when Bernanke produced the now infamous Bailout Spike by injecting almost $1 trillion of new money into the U.S. economy. On April 15, 2008, the Fed held $866 billion in assets, which served as the monetary base for the nation.  On April 15, 2009, it held $2.2 trillion. A decline in purchasing power of the dollar will follow this increase in the money supply.

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