Here’s an interesting item sent to me by one of my contacts:

Towards a Global Currency?
Towards the integration of the Dollar and the Euro?
by Michel Chossudovsky

With a view to restoring financial stability, World leaders have called upon the Group of 20 countries (G-20) to instigate a new global currency based on the IMF’s  Special Drawing Rights (SDRs).

The media has presented the global currency initiative as a consensus building process, in which BRIC countries (Brazil, Russia, India and China) would participate in the revamping of the international monetary system.

Russia and China have put forth “proposals” which have been highlighted as possible alternatives to the dollar.  China has proposed the formation of a new global currency based on a reform of SDR system:

“It is a feasible plan to reform the present SDR and make it into a real settlement currency, a universally accepted ‘currency basket’ that would replace the dollar at the heart of the monetary system,”  (Li Ruogu, chairman of the Export-Import Bank of China, Reuters, 6  July 2009) China’s proposal does not imply a major shift in global banking arrangements, nor does it open up a window of debate regarding monetary reform.

On the other hand, Russian President Dmitry Medvedev has explicitly questioned the composition of the SDR basket and has called upon the IMF “to expand the currency basket of SDRs to include the Chinese yuan, commodity currencies and gold in order that it matures into  a reserve currency.”

Geopolitics

Global Geopolitics bears a relationship to the international monetary system. Control over money creation is an instrument of economic conquest.

The invasion and occupation of Iraq was to exclude rival Russian and Chinese interests from the Middle-East and Central Asian oil fields.

The reform of the international monetary system is a project of the dominant financial elites, which is discussed behind closed doors. It is unlikely that Russia and China, which in large part remain subordinate to Western banking interests, will perform a significant role in central banking functions at a global level.

Moreover, this initiative occurs at a time of East West confrontation, amidst veiled US-NATO threats directed against Russia as well China.  The establishment of a new global currency and central banking system is an instrument of global economic domination which is intimately related to the broader US-NATO military agenda.

While the SDR basket composition could be modified or revised, it is unlikely that the Yuan and the Ruble would be allowed to perform a role as major reserve currencies. What is more likely to occur is the formation of a global proxy currency predicated largely on the Euro and the US dollar. In response to the Dollar-Euro hegemony, Russia, China and the member states of the Shanghai Cooperation Organization (SCO) may decide to develop bilateral trading arrangements in Rubles or Yuan (renminbi).

Special Drawing Rights

SDRs are a composite accounting unit used by the IMF and the World Bank in loan agreements with member countries. The SDR is a basket of essentially four major currencies: the US dollar, the Euro, the British pound and the Japanese Yen.
Composition of basket (value of 1 XDR)

The IMF has recently presented a plan for issuing debt denominated in SDRs rather than US dollars. The media has heralded this decision as a major innovation, when in fact the Bretton Woods institutions have, for many years, been issuing debt denominated in SDRs.

“Today, the SDR has only limited use as a reserve asset, and its main function is to serve as the unit of account of the IMF and some other international organizations. The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members.” (IMF Fact Sheet on SDRs )

What would happen if a new global currency were to be devised using the existing SDR framework?

SDRs would no longer be an accounting unit but a unit of currency in a basket. Actual central banking functions, however, would not necessarily be transferred to the IMF, they would remain in the hands of four constituent central banks:  The US Federal  Reserve, the European Central Bank based in Frankfurt, the Bank of England and the Bank of Japan. I

The IMF is a bureaucracy which serves the interests of major private financial institutions.

While the IMF would formally be responsible for overseeing a global currency, the IMF would not actually be responsible for monetary policy. Under the existing SDR composition, the central banking functions would be divided between four central banks. These central banks are in turn controlled by a handful of private banking interests.

A global currency based on the existing SDR arrangement would not fundamentally change the global monetary order.

The SDR would be a proxy currency. Under the present composition of the SDR, what we would be dealing with is an alliance between US, British, European and Japanese banking institutions, ultimately with the US dollar and the Euro predominating.

Euro-Dollar Rivalry

From the outset in 1999, there has been a clash between the Euro and the dollar. In Eastern Europe, the former Soviet Union, the Balkans extending into Central Asia, the dollar and the Euro are competing with one another. Ultimately, control over national currency systems is the basis upon which countries are colonized. While the U.S. dollar prevails throughout the Western Hemisphere, the Euro and the U.S. dollar are clashing in the former Soviet Union, Central Asia, Sub-Saharan Africa and the Middle East.

Prior to the invasion of Iraq in March 2003, there was a political confrontation between the Franco-German alliance and the dominant Anglo-American military axis.

With the election of pro-US governments in both France and Germany, a political consensus seems to have emerged with regard to the Middle East war. In turn, this consensus regarding the US-NATO military agenda favors greater cooperation and integration between the US and the EU in global financial and monetary affairs.

Would this potential “alliance” between powerful overlapping American, British, European and Japanese banking interests lead to the integration of the Euro and the dollar into a single global currency?

This integration would lead to reinforcing the hegemonic control of a small number of global banking and financial institutions over the process of money creation. This, in turn, would overshadow the functions of national central banks, encroach on the sovereignty of the Nation State and eventually lead to a new phase of the global debt crisis.

A real, honest credit crunch definition is long overdue, so here it is.

Credit crunch: a panic-driven massive withdrawal of credit from all sections of society desperately in need of it by banks that have previously been engaged in an orgy of unsustainable, irresponsible lending of fictitious money in huge amounts largely to people who any fool could see had no means of repaying it.

That’s quite an indictment of banks and the banking system, so let’s take a closer look at what triggered the credit crunch, now grown into a full-blown recession around the globe and ruining countless peoples’ lives.

Money is created by the banking system out of nothing. This is wrong, but it’s the way it is, unfortunately. It is then lent at interest to all sections of the community – big businesses, small and medium sized businesses, governments, international institutions, nationalised industries, banks themselves (big and small) and, of course, private citizens.

This makes it unrepayable debt. Anyone or any institution of whatever nature that manages to repay its borrowings plus interest does so at the cost of other borrowers not being able to do so. Traditionally governments, even with their power of taxation, have not been able to repay the money they have borrowed. The core lending is shoved into a pile and called the “national debt” or “treasury bonds”, or something like that.

Because this debt is unrepayable the whole system is unworkable in the long run. Sure, it can appear to be working for long periods, while lending is increasing and the amount of money in circulation is therefore keeping fairly constant in spite of large amounts being withdrawn through loan repayments. But after a number of years the system always threatens to collapse, because there is a limit to the amount of phoney money the banks can lend before their stockpile of real money – gold in former times, now more likely treasury bills and other securities – threatens to dry up and destroy the solvency of the banks themselves.

Indeed, a large number of banks have collapsed in spite of calling a halt to further lending and in spite of billions having been pumped into the banking system by leading governments such as the United States and Great Britain. As this is being written (late July 2009) there are still banks in the USA folding, and this is in spite of the recent stock market rally.

The only people benefiting from all of this are the really huge banking houses such as the Rothschilds and J.P.Morgan. Even Goldman Sachs, currently back in profit and paying its fund managers obscene bonuses with taxpayers’ money, is in very dangerous waters.

It’s obvious from even a brief survey of the situation that the system of having private bankers control the currency, an absolutely vital control lever of any economy, is sheer lunacy. Private bankers use the incredible power vested in them for their own enrichment and power, and the evil “hidden agenda” they pursue in their quest for global domination.

In Great Britain they have had this power unopposed since 1694, when the UK central bank, the Bank of England, was founded. It kept its name even after the United Kingdom was formed from the union with Scotland and Ireland some years later.

In the United States there were several criminal attempts to foist a central bank on the new republic early in the nineteenth century but each time those attempts were eventually rejected. But in 1913, on Christmas Eve, while most people were going home to their families for the Christmas holiday, a small group of criminal plotters let by Nelson Aldrich, a corrupt senator whose daughter married a Rothschild, managed to get the Federal Reserve Bill passed before only a handful of senators, and economically enslave the United States.

Since then, of course, the USA has suffered the Great Depression of the 1930s, numerous financial panics (which the Federal Reserve Act of 1913 was supposed to put an end to), and an escalating level of public and private debt. The mighty economic engine of the United States has gradually been withered away and is now in serious danger of complete collapse.

Thus is the story, or a small part of it, so far. The worst of the current recession is shortly to come.

Philip Gegan

This video I have just been referred to is, I feel, so important, that I have embedded it here and I urge all visitors to this blog to view it.

It lasts just over 10 minutes, and in places you have to read the text quite quickly before it disappears, and you may find the background makes it difficult sometimes, in which case just pause and rewind.

This should be viewed by all intelligent, right minded people of all countries. If the argument presented here is true, and I believe it is, then urgent action is needed on the part of all of us. If enough people like us unite and act in unison quickly then the wretched Rothschilds will be history.

So spread the word, more urgently than ever before . . .

Philip Gegan