Guest Post: Doing The Global Currency Shuffle

Tyler Durden's picture

Submitted by Brandon Smith of Alt-Market

Doing The Global Currency Shuffle

In mainstream financial circles, the concept of a global currency is often spoken of only with an air of caution. It is approached always in hypothetical terms. It is whispered of as some far off dream; a socio-economic moon landing in the far reaches of fiscal space. Perhaps
in 2015, or 2020, or maybe 2050, but certainly never just over the
horizon, or right around the corner posing as an innocuous trade asset
created over 40 years ago and used only on rare occasions. Unfortunately,
the development of a centralized global security representing the
creation of a supranational economic body is much closer than many would
care to admit…

The most common argument made in the mainstream
against a global currency taking shape is the argument that no other
currency in the world today has the strength or widespread circulation
necessary to replace the dollar as a primary reserve unit. This is true, if, you only look at separate currencies, and not the big picture. The
reality is, central banks and the IMF have no intention of replacing
one national currency with yet another national currency as the world
reserve. What they DO intend to do, however, is replace the
dollar with a basket of national currencies linked together and
homogenized under a single unit. This has been openly
announced by the IMF for months, and Dominique Strauss-Kahn even
produced a press release explaining the plan (this was before he
apparently watched ‘Maid in Manhattan’ 57 times in a row then allegedly
tried to “romance” a cleaning lady, which of course landed him in
court):

http://www.imf.org/external/np/speeches/2011/021011.htm

The G20 has also raised discussion of a global currency and a greater oversight role for the IMF on a number of occasions:

http://www.themoscowtimes.com/business/article/at-g20-kremlin-to-pitch-new-currency/375364.html

http://www.asianews.it/news-en/Sarkozy-in-favour-of-an-international-currency-of-reference-21179.html

A more in-depth look at the IMF plan for the SDR
can be seen in a white paper released at the beginning of this year
entitled “Enhancing International Monetary Stability – A Role For The
SDR?”:

http://www.imf.org/external/np/pp/eng/2011/010711.pdf

A global currency, or at least the
foundation for one, already exists in the form of “Special Drawing
Rights” (SDR’s), created by the IMF in 1969 as paper collateral used to
replace gold as the primary means of international trade between
governments and central banks without the need for Forex exchanges. That is to say, the SDR was used as a tool for displacing the strength of gold. Today,
the asset has morphed into a trade mechanism representing a basket of
currencies, and, a tool to displace the U.S. dollar as the world reserve
currency.

Skeptics will argue that the SDR is a “long way”
from being ready to unseat the dollar, but, these economists and pundits
rarely consider that the financial circumstances of markets today could
quickly change tomorrow. Yes, by the standards of this
very moment, a move to elevate the SDR to reserve status is impractical,
mainly, because the dollar is still clinging to its relative value and
widespread use. This will not be the case for much longer.

Over the past month, the “big three” ratings
agencies; Moody’s, Fitch, and S&P, have suddenly decided to do the
job they should have been doing years ago, and have begun a wild roller
coaster ride of credit downgrades for countries with immense Debt-to-GDP
ratios. Greece has been junked. Ireland has been junked. Portugal has been hit. Spain has been hit, and is ready for yet another downgrade. Italy is on the chopping block. Finally,
even the U.S. is near losing its AAA status as S&P has announced it
will decide within the next month whether a downgrade of our rating
will soon be necessary.

The most important aspect of the S&P
announcement is their statement that the downgrade is NOT about the
impending debt ceiling decision, but America’s overall creditworthiness
and our lack of ability to maintain our current spending and
inflationary habits. That is to say, even if the debt
ceiling is raised, as all the Keynesians are clamoring for, we could
still lose our top credit rating:

http://market-ticker.org/akcs-www?singlepost=2623832

This storm of downgrades after years of inaction by ratings agencies, in my view, is simply not a coincidence. The
fact that Ben Bernanke has admitted that QE3 is on the table as well
after the Fed denied any need for more stimulus only two months ago is
also highly suspicious (though he tried to take back the statement later
after a thorough grilling from Ron Paul):

http://www.businessinsider.com/black-and-white-and-red-all-over-2011-7

The bottom line is that if the ceiling is raised, the Fed is ready to print the dollar into an early grave. If the ceiling is frozen in place, America defaults on its debts and its credit rating evaporates. Either way, the dollar will inevitably lose its world reserve status. Enter the SDR…

What we are witnessing is a careful and deliberate
“shuffle” of economic circumstances towards a financial and political
environment more receptive to a global currency. Or, indeed, a public so desperate for stability as to have no other choice but a global currency. Here
are some of the steps that will likely take place and in certain cases
must take place before the SDR is able to fulfill the role the IMF
intends. Many of these steps are already being implemented as this is written:

1) The IMF Must Increase Circulation Of SDR’s

The normal restrictions on SDR printing were
removed in 2008 by the IMF just as the credit crisis began to take shape
under the guise of “producing more liquidity”. SDR’s can now be created in unlimited numbers. Allocations of SDR’s by IMF member countries leaped in 2008 to 2009. America’s holdings of SDR’s grew from 21 billion to 203 billion in the span of a single year:

http://www.imf.org/external/np/fin/tad/extsdr1.aspx

Using the “SDR Department”, the IMF has also been
issuing SDR’s to emerging market countries and needy nations off the
books, at the expense of the American taxpayer! Rich
countries like the U.S. pay into the SDR Department program which is
supposedly designed to redistribute “foreign aid” to poorer countries as
low interest loans denominated in SDR’s. These loans show up nowhere on our Federal Budget:

http://www.house.gov/jec/imf/sdrdept.pdf

In 2004, the cost of paying into this program was around $5 Billion a year, but this has surely been expanded since. Finding accurate numbers on current U.S. loans through the hidden SDR Department program has proven difficult, to say the least…

The point of all this? The SDR is being widely circulated under various operations, some of them public, some of them not so public.

2) Standardized Exchange Tables For The SDR Must Be Put In Place

The IMF now releases daily conversion and exchange tables to SDR’s for almost every other currency on the planet:

http://www.imf.org/external/np/fin/data/rms_five.aspx

One important aspect of SDR conversion to take note
of is that the currencies most highly valued on global forex markets,
and the SDR table, are the Bahraini Dinar, and the Kuwaiti Dinar. The
Bahraini Dinar is pegged directly to the SDR basket, while the Kuwaiti
Dinar is pegged to “an undisclosed basket of currencies” (probably the
SDR). The dollar, on the other hand, is relatively weak in
comparison when converting to SDR’s, even though most of the IMF’s
funding, and thus ability to create SDR’s, comes from the U.S.

Doesn’t seem fair, does it…?

Another important fact to remember is that the IMF
admittedly sets the valuation of the SDR using factors outside of
natural supply and demand. Meaning, they have the ability to place any value they please on the SDR versus other currencies. It
is no surprise then that currencies which tie themselves to the IMF
basket and placate IMF desires are rated strong in SDR’s, and perform
well in forex markets, while the dollar, which remains (supposedly)
independent, is weak versus SDR’s. Today, one dollar is worth 62 cents in SDR’s.

3) The SDR Must Be Made Indispensable To Global Markets

The IMF has openly suggested that the SDR could be
used as an intermediary asset in volatile currency markets through what
is sometimes referred to as a “Substitution Account”. Meaning,
if China, for example, wished to dump their holdings of U.S. dollars
because they are devaluing rapidly, they could exchange those dollars
for SDR’s instead of directly converting them into another standard
currency, like Euros, or Yen. This, according to the IMF, would lessen the direct damage to the Dollar, because the SDR is partly denominated in dollars. Therefore,
as China throws out dollars in exchange for SDR’s, the value of the
American Greenback goes down, but conversely, the value of America’s SDR
holdings will go up.

This sounds like a brilliant strategy to offset sudden currency collapse. However,
it is actually a very subversive way to slowly elevate the SDR as a
world reserve currency itself, and to replace the dollar entirely, while
the IMF plays the hero. It also allows the IMF to slowly “harmonize” all the world’s currencies until there is no distinction in their value. The SDR becomes a de facto reserve unit without officially overthrowing the dollar.

If the U.S. is faced with the nightmare of having
its own currency dumped by international central banks, obviously, our
Treasury would jump at the chance to support conversion to the SDR to
lessen the damage, rather than face the full brunt of losing our reserve
status. In fact, the U.S. would have NO CHOICE but to
support the SDR and the IMF as the intermediary in all global financial
transactions, otherwise, we would face certain long term full spectrum
collapse. The only support holding up our financial system would then be our membership in the SDR basket. We would become completely dependent, and the IMF would have total centralized control over our economy.

What the IMF has done is create a potential
environment in which any country that does not participate in SDR
exchange will be left in the dust by every country that does. They have conjured an artificial economic matrix, where traditional laws of supply and demand no longer apply. A kind of “manipulated evolution” of finance. A chimera economy. They will have the power to determine the value of every currency on the planet arbitrarily using the SDR Substitution Account.

4) China Must Be Given Membership In The SDR

Right now, it appears, the only thing holding the
SDR back from its debut as a global currency asset is the inclusion of
emerging markets into the IMF basket. Talk of China joining the basket in 2015 has been floating around for the past couple years. However, I believe that the inclusion of the Chinese Yuan may come much faster than this.

New IMF Managing Director, Christine Lagarde, has
offered China a greater role in the IMF power structure, including a
post for Min Zhu, a Chinese national, as a deputy managing director:

http://www.reuters.com/article/2011/07/06/us-imf-lagarde-china-idUSTRE7655JM20110706

Lagarde and members of the G20 have also been
pressing hard for the addition of the Yuan and perhaps other currencies
into the SDR. A decision on Chinese inclusion may come as soon as this November:

http://www.emergingmarkets.org/Article/2818350/G20-presses-for-yuan-SDR-inclusion.html

http://english.capital.gr/News.asp?id=1163175

5) China Must Decouple Completely From The Dollar

One of the points of contention over Chinese inclusion in the SDR is its ties to the U.S. dollar and economy. That is to say, China would first have to decouple from the dollar, before coupling to the SDR. Its sounds like some weird parasitic experiment, and, it is.

China started taking steps to make decoupling from
the U.S. and the dollar a reality back in 2005 (which suggests
foreknowledge of collapse), when they began issuing Yuan denominated
bonds (to circulate Yuan around the world), and, when they began
converting away from an export based economy and towards a consumer
based economy. The problem is that because of the wider
circulation of Yuan, the increase in stimulus, and the Chinese refusal
(so far) to allow faster currency appreciation, China is now in the
midst of a double digit inflationary crisis (that's REAL inflation
folks, not fraudulent Chinese CPI numbers):

http://english.peopledaily.com.cn/90001/90776/90882/7432861.html

Because they have deliberately restructured towards
a consumer based economy, eventually, China will have to allow the Yuan
to increase substantially in value versus other currencies in order to
amplify the buying power of its citizens. Otherwise, they will be crushed under the weight of rising prices:

http://www.reuters.com/article/2011/06/26/us-britain-china-idUSTRE75P1V120110626

This cannot be done without a considerable dump of
their forex reserves and treasury holdings, most of which are composed
of U.S. dollars and securities. This means that in order to
counter inflation, and to be included in the SDR, China will have to
liquidate a large portion of its U.S. holdings. This would strike the American economy hard.

6) The Dollar Must Be Removed As The World Reserve Currency

All of the above factors are leading towards one obvious conclusion; the end of the dollar as a reserve currency. The
IMF will never achieve its goal of complete centralized administration
of the global economy without a common supranational currency unit. And, a supranational currency unit cannot exist while the dollar remains in its current position. Thus, for the IMF to succeed, the dollar must be removed.

The expansive debt of the U.S., the endless fiat
printing of the Federal Reserve, the Chinese adaptation away from the
dollar and towards the SDR, and the quiet spread of the SDR itself, are
all leading to this end. This does not mean, though, that the tangible version of the dollar will disappear. The
interesting thing about the SDR con game is that many Americans may
barely notice the transition of the global economy into IMF hands,
because physical dollars will likely remain. We might feel
the heartache of a devaluing monetary system, and an extremely weakened
economy, but the flow of power will be obscured for a time from those
who are unaware. In the end, all currencies will be tied to
and completely reliant on the SDR, but our Greenback funny money will
still be in our pockets. The issuance of an “SDR note” may come one day (if we allow this farce to continue), but it is not necessary. As long as every currency is required to be pegged to the SDR, the IMF will retain control.

A common assumption is that changes like these take
place in some distant future we will never witness, not right under our
noses while we sleep. The current evidence suggests,
though, that an engineered transference to a highly condensed global
economic system is underway right now, and that our country will suffer
greatly in the process. To understand the tactically
implemented disaster we are about to experience, it is vital to become
aware of the intended end result. Just as in understanding any criminal act, it is vital to first understand a criminal’s ultimate motive.

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Kali's picture

I hope I die before I see a global currency.  Global currency = Global central control.  Blah. F-ing geniuses.

Atomizer's picture

You won't see global currency. They can't manage singular currency under their very complex system of theft. No one will make it that easy for them to steal.

Kali's picture

I hope you are right.

Bananamerican's picture

"The development of a centralized global security representing the creation of a supranational economic body is much closer than many would care to admit…"

relax Kali...NFW FTW

Pegasus Muse's picture

Use honest money --- gold and silver --- and tell those lying, thieving, fraudster, scumbag bankster parasites to take their SDR's and bugger off.

SilverDOG's picture

Atomizer,

  The assumption of currency management ineptitude is foolhardy. History readily shows management of currency has not changed, and those who do "manage" currency remain.

With a multi generational strategy, management succeeds every single time. Your comment is proof thereof. Unless laden with sarcasm [sarc].

zuuuueri's picture

this is just one more desperate move at the end of empire. 'they' might be able to buy a very short amount of time with such a thing, but probably not, because by the time they manage to roll it out, it will already be too late to do them any good. But such a globally centralized fiat currency would indeed be one more extreme mechanism for concentrating and transferring wealth and control... problem is, there is less and less out there left to take- this is already eroding the whole system, and anything that allows the system to eat its own foundations faster... will not prolong its life. 

so, let them try, let them do it, it won't last long. Try to keep yourself and yours out of the way of the worst of it. 

So much wealth will be destroyed in these and coming years, that if you come out of it with your health, your family, and your humanity, you can count yourself rich.

Poor Grogman's picture

+1 Totally agree

Greed always destroys itself.

Big Ben's picture

The perfect global currency is a four letter word to economists and central bankers: GOLD.

drbower's picture

don't you think the bankstas have an answer to this?

So, thus it comes, the mark of the Beast, as prophesied in
the Bible, the book of Revelation.  No
one will be able to buy or sell without the mark, which, incidentally includes
gold and silver, to control them as well. 
Complete control. 

  MARANATHA
(translation:  even so, come quickly,
Lord Jesus).

mayhem_korner's picture

I understand and appreciate the potential correlation of the mark and a universal currency, but where does the link come from that it includes gold and silver? 

Not trying to debunk, just curious.  I study the Scriptures quite a bit.

drbower's picture

its not specifically in the bible, just an interpretation.  The verse says, no one will be able to buy our sell without the mark, and to me this means a global policing of a digital currency, with much resistance(the resistance verses are there, let me know if u need them), therefore the forcing of buying and selling only with the mark.  If interested in Revelation, an interesting book is Walid Shoebat's book GODS WAR ON TERROR

drbower's picture

OOPS HIT THE BUTTON TOO MANY TIMES

drbower's picture

its not specifically in the bible, just an interpretation.  The verse says, no one will be able to buy our sell without the mark, and to me this means a global policing of a digital currency, with much resistance(the resistance verses are there, let me know if u need them), therefore the forcing of buying and selling only with the mark.  If interested in Revelation, an interesting book is Walid Shoebat's book GODS WAR ON TERROR

drbower's picture

its not specifically in the bible, just an interpretation.  The verse says, no one will be able to buy our sell without the mark, and to me this means a global policing of a digital currency, with much resistance(the resistance verses are there, let me know if u need them), therefore the forcing of buying and selling only with the mark.  If interested in Revelation, an interesting book is Walid Shoebat's book GODS WAR ON TERROR

drbower's picture

its not specifically in the bible, just an interpretation.  The verse says, no one will be able to buy our sell without the mark, and to me this means a global policing of a digital currency, with much resistance(the resistance verses are there, let me know if u need them), therefore the forcing of buying and selling only with the mark.  If interested in Revelation, an interesting book is Walid Shoebat's book GODS WAR ON TERROR

drbower's picture

its not specifically in the bible, just an interpretation.  The verse says, no one will be able to buy our sell without the mark, and to me this means a global policing of a digital currency, with much resistance(the resistance verses are there, let me know if u need them), therefore the forcing of buying and selling only with the mark.  If interested in Revelation, an interesting book is Walid Shoebat's book GODS WAR ON TERROR

drbower's picture

its not specifically in the bible, just an interpretation.  The verse says, no one will be able to buy our sell without the mark, and to me this means a global policing of a digital currency, with much resistance(the resistance verses are there, let me know if u need them), therefore the forcing of buying and selling only with the mark.  If interested in Revelation, an interesting book is Walid Shoebat's book GODS WAR ON TERROR

drbower's picture

its not specifically in the bible, just an interpretation.  The verse says, no one will be able to buy our sell without the mark, and to me this means a global policing of a digital currency, with much resistance(the resistance verses are there, let me know if u need them), therefore the forcing of buying and selling only with the mark.  If interested in Revelation, an interesting book is Walid Shoebat's book GODS WAR ON TERROR

moonstears's picture

Maybe Ezekiel 7:19?: loosely: "they throw gold and silver in the streets, it will not save them"

New World Chaos's picture

Certainly looks like the Beast's currency is already here.  And not using it will be hard.  How will you pay your property taxes? Good luck finding some place that offers allodial title; it pretty much doesn't exist anymore because all governments want us to be serfs.  What about drivers license fees?  Are you prepared to live as motor gypsies, shooting any cop who tries to bust you for not having a drivers' license?  It's either that or regularly lose your "home".  Any way you look at it, your paths quickly lead to all out war with the Beast or a life in jail, and neither of these are good for bringing up the next generation of honest people.  This is as the Beast wants it. 

When they come to make you take the mark you can only kill the cop who is trying to force it on you.  But what to do when they do the SDR sleight of hand in the next few years?  Is it sufficient to say that you will never take the SDR or any currency backed by it in exchange for honest work?  That your religion will be to live off the Beast's dole and make an army of dole babies who you will raise honestly... or is it pretty much impossible to remain clean in this case?

What's your list of resistance verses, BTW?  Christ, I never thought I would see this in my lifetime...

zhandax's picture

Are you prepared to live as motor gypsies, shooting any cop who tries to bust you for not having a drivers' license?

Worked for the Colombians who moved to Miami the same time I did.  They soon learned that paying them off was much simpler than shooting them and there were ancillary benefits.......

Regardless whether you have the balls to carry it out, you have to think like a predator to understand the game.

drbower's picture

i think resistance lies in timing of the rapture.  If you are a pre-tribulation viewer, all this will come after the tribulation. we all need to examine ourselves, to see if Jesus is truly our master.

drbower's picture

don't you think the bankstas have an answer to this?

So, thus it comes, the mark of the Beast, as prophesied in
the Bible, the book of Revelation.  No
one will be able to buy or sell without the mark, which, incidentally includes
gold and silver, to control them as well. 
Complete control. 

  MARANATHA
(translation:  even so, come quickly,
Lord Jesus).

KeyserSoze's picture

The currency shuffle is gonna play out much like the Truffle shuffle for the US. And it ain't gonna be pretty.

P.S. Corey Feldman = China.
Fat Kid = US Govt.

http://www.youtube.com/watch?v=t5whaRkuipU

sellstop's picture

The chinese are trying to buy up the worlds resources before they allow their own currency to appreciate. When the rnmbi is allowed to gain traction it will place a lot more buying power in the hands of the chinese workers. The price of resources will explode. It is advantageous to them to have supplies in place before that time.

The commodity supercycle has a long way to go.

gh

sellstop's picture

as an added note: we may think a global currency is a good idea before it is all over!!

gh

mayhem_korner's picture

Lots of things can pass for global currency.  The issue is whether or not it's centrally controlled...

i-dog's picture

"we may think a global currency is a good idea before it is all over!!"

That's certainly the core of their strategy to achieve it ... Order out of chaos.

Ordo ab chao, bitchez! The beatings will continue until morale improves!

Mac1492's picture

i dont think the chiniese know what the fuck there doing... to many layers of beaurcrats to achive anything... they will go down in flames of civil war once a billion poor farmers wake the fuck up

i-dog's picture

I see ... so you're expecting a billion poor chinese farmers to wake up before a billion poor European/American tax slaves wake the fuck up? Good luck with that soporific!

lynnybee's picture

I feel trapped / like i have to run for my life .   there is nowhere to hide.  

Kali's picture

Sucks don't it?  I still think this is hell.  The good moments, fleeting and few, the bad moments, unending and many.  We are in prison.

Mac1492's picture

yes we are bro, we truly are...

Kali's picture

Hey Mac!  That's sis.  : )

 

JohnG's picture

Gold, land, diamonds, art, and even wine. In that order.

That's where.

Mine's mostly in gold.

DoChenRollingBearing's picture

OK, I will not argue with that.

I have gold, land, and even wine (same order).  Some CASH FRNs as well, never know...

And survival supplies (though not enough).

See you all on the other side...

Goatboy's picture

I dont see anything bad in this. Maybe its because I am not from US.

Thomas Paine said: "My country is the world, and my religion is to do good."

 

I fully support his idea.

Mac1492's picture

well it seems humanity hasn't evolved much from when those fine words were spoken /writtine... common sense in this day and age is knowing how to milk the government 

mayhem_korner's picture

'cuz regional currency (Euro) worked so well...

I say go for it.  Full monetary centralization.  Let the creditors argue for their standing based on their "holdings," let the narcissists jockey for oversight of the NWO currency.

Then watch how quickly local trade accelerates to a decentralized, barter-based system.  Which smokes out the control-hungry kleptocrats...and we have a very "uncivil" war.

Just my two cents...

Mac1492's picture

try to barter with joe six pack aint gonna happen global centralization is the future like it or not 

Kali's picture

The boot stomping on your face 4 evah!