Posted by: John Gilmore | September 16, 2006

China Takes Aim at Dollar

I mentioned in previous posts that as the financial crisis continues to worsen – we’re eventually going to see world leaders propose a new global monetary system. I have also mentioned that if you pay close attention to mainstream media articles – you can get a good idea of what is being planned for our future. The article below is a good example.
The premise behind this article is that China is getting nervous about its exposure to U.S. debt and wants some changes to the global financial system to alleviate some of its exposure – certainly a valid concern considering the amount of U.S. debt and currency they hold. The problem is that there is a hidden agenda behind this article – as there is a hidden agenda in many of the articles you read regarding the current crisis. I must say – once again – the deception being perpetrated here is highly intelligent and it’s unknown to almost all of the world’s population.
If you were the global elite and wanted to begin to deceptively prepare the world’s population for a global currency – how would you do this? You would probably talk about how unstable the world’s reserve currency could become and the risks involved with the current reserve currency – and that’s exactly what we’re seeing. If you were the global elite and needed a country to propose a change to the world’s current reserve currency, you would probably choose the country with the most exposure to a fall in the value of the dollar and U.S. debt – and that’s exactly what we’re seeing.
Again, on the surface, it seems perfectly logical that China would request a new, more stable, global currency – and that’s the deception. You see how truly deceptive these people are – it looks logical – and you forget that all of these things are moving us to a global monetary system – just as the Bible tells us will happen. As I’ve said before – our spiritual enemy is much more deceptive than we have been led to believe. His children in this world are not going to take over the world by force – he’s doing it with deception. The ruler of this world is telling you that his plans will help restore order and return you to prosperity – when the truth is that he’s causing all of these problems – so that you’ll trade your freedom for some semblance of security.

Without any biblical knowledge – without any guidance from God – you will be led down a path that is paved with great intentions – and that path will lead you to your destruction. If our nation does not return to God and begin seeing the world through His eyes – we’re going to wakeup one day in bondage – and wonder how it could have happened.

We should also consider that recent actions by the Federal Reserve ($1.5 trillion in new dollars flooding the system in coming months) will have the exact effect that the Chinese government is worried about. Inflation is going to increase significantly in coming months and this will eventually destroy the value of the dollar. See how they are manipulating you? They cause a problem – and then solve it in a way that moves their agenda forward – and you are none the wiser.

The remaining questions are – what type of currency will they propose for the world and what will they name it? We should pay close attention to any mainstream articles that speak to these questions. I say this because the new global monetary system will be controlled by the global elite – so the name of the new global currency could be a clue to help us solve the mystery of the Mark. As I’ve said before – the Mark isn’t the currency itself – but refuse the Mark (and allegiance to the world system) and you will be cut off from use of the global currency – so there is a very high probability that the new currency will eventually be electronic only – no cash or coins – credit/debit cards, smart cards, electronic chips only. Also remember – the Mark is related to the name of the global elite (Illuminati and their symbolism, etc.) and some type of number. Keep your eyes open – I believe we’re nearing the point in history where we’re going to see clues to unlock this prophetic mystery.

“He also forced everyone, small and great, rich and poor, free and slave, to receive a mark on his right hand or on his forehead, so that no one could buy or sell unless he had the mark, which is the name of the beast or the number of his name.

This calls for wisdom. If anyone has insight, let him calculate the number of the beast, for it is man’s number. His number is 666.” (Revelation 13:16-18)

jg – March 24, 2009
_________________________
MARCH 24, 2009

China Takes Aim at Dollar
By ANDREW BATSON
Wall St. Journal
BEIJING — China called for the creation of a new currency to eventually replace the dollar as the world’s standard, proposing a sweeping overhaul of global finance that reflects developing nations’ growing unhappiness with the U.S. role in the world economy.
The unusual proposal, made by central bank governor Zhou Xiaochuan in an essay released Monday in Beijing, is part of China’s increasingly assertive approach to shaping the global response to the financial crisis.

David Semple of Van Eck Emerging Markets Fund outlines opportunities in China’s real-estate and retail sectors, along with greater stability in Russia. But the situation in Eastern Europe is still uncertain. Polya Lesova reports.

Mr. Zhou’s proposal comes amid preparations for a summit of the world’s industrial and developing nations, the Group of 20, in London next week. At past such meetings, developed nations have criticized China’s economic and currency policies.

This time, China is on the offensive, backed by other emerging economies such as Russia in making clear they want a global economic order less dominated by the U.S. and other wealthy nations.

However, the technical and political hurdles to implementing China’s recommendation are enormous, so even if backed by other nations, the proposal is unlikely to change the dollar’s role in the short term. Central banks around the world hold more U.S. dollars and dollar securities than they do assets denominated in any other individual foreign currency. Such reserves can be used to stabilize the value of the central banks’ domestic currencies.

Monday’s proposal follows a similar one Russia made this month during preparations for the G20 meeting. Like China, Russia recommended that the International Monetary Fund might issue the currency, and emphasized the need to update “the obsolescent unipolar world economic order.”

Chinese officials are frustrated at their financial dependence on the U.S., with Premier Wen Jiabao this month publicly expressing “worries” over China’s significant holdings of U.S. government bonds. The size of those holdings means the value of the national rainy-day fund is mainly driven by factors China has little control over, such as fluctuations in the value of the dollar and changes in U.S. economic policies. While Chinese banks have weathered the global downturn and continue to lend, the collapse in demand for the nation’s exports has shuttered factories and left millions jobless.

In his paper, published in Chinese and English on the central bank’s Web site, Mr. Zhou argued for reducing the dominance of a few individual currencies, such as the dollar, euro and yen, in international trade and finance. Most nations concentrate their assets in those reserve currencies, which exaggerates the size of flows and makes financial systems overall more volatile, Mr. Zhou said.

Moving to a reserve currency that belongs to no individual nation would make it easier for all nations to manage their economies better, he argued, because it would give the reserve-currency nations more freedom to shift monetary policy and exchange rates. It could also be the basis for a more equitable way of financing the IMF, Mr. Zhou added. China is among several nations under pressure to pony up extra cash to help the IMF.

John Lipsky, the IMF’s deputy managing director, said the Chinese proposal should be treated seriously. “It reflects officials’ concerns about improving the stability of the financial system,” he said. “It’s interesting because of China’s unique position, and because the governor put it in a measured and considered way.”

China’s proposal is likely to have significant implications, said Eswar Prasad, a professor of trade policy at Cornell University and former IMF official. “Nobody believes that this is the perfect solution, but by putting this on the table the Chinese have redefined the debate,” he said. “It represents a very strong pushback by China on a number of fronts where they feel themselves being pushed around by the advanced countries,” such as currency policy and funding for the IMF.

A spokeswoman for the U.S. Treasury Department declined to comment on Mr. Zhou’s views. In recent weeks, senior Obama administration officials have sought to reassure Beijing that the current U.S. spending spree is a short-term effort to restart the stalled American economy, not evidence of long-term U.S. profligacy.

“The re-establishment of a new and widely accepted reserve currency with a stable valuation benchmark may take a long time,” Mr. Zhou said. In remarks earlier Monday, one of his deputies, Hu Xiaolian, also said the dollar’s dominant position in international trade and investment is unlikely to change soon. Ms. Hu is in charge of reserve management as the head of China’s State Administration of Foreign Exchange.

Mr. Zhou’s comments — coming on the heels of Mr. Wen’s musing about the safety of China’s dollar holdings — appear to be a warning to the U.S. that it can’t expect China to finance its spending indefinitely.

The central banker’s proposal reflects both China’s desire to hold its $1.95 trillion in reserves in something other than U.S. dollars and the fact that Beijing has few alternatives. With more U.S. dollars continuing to pour into China from trade and investment, Beijing has no realistic option other than storing them in U.S. debt.

Mr. Zhou argued, without mentioning the dollar by name, that the loss of the dollar’s de facto reserve status would benefit the U.S. by avoiding future crises. Because other nations continued to park their money in U.S. dollars, the argument goes, the Federal Reserve was able to pursue an irresponsible policy in recent years, keeping interest rates too low for too long and thereby helping to inflate a bubble in the housing market.

“The outbreak of the crisis and its spillover to the entire world reflected the inherent vulnerabilities and systemic risks in the existing international monetary system,” Mr. Zhou said. The increasing number and intensity of financial crises suggests “the costs of such a system to the world may have exceeded its benefits.”

Mr. Zhou isn’t the first to make that argument. “The dollar reserve system is part of the problem,” Joseph Stiglitz, the Columbia University economist, said in a speech in Shanghai last week, because it meant so much of the world’s cash was funneled into the U.S. “We need a global reserve system,” he said in the speech.

Mr. Zhou’s idea is to expand the use of “special drawing rights,” or SDRs — a kind of synthetic currency created by the IMF in the 1960s. Its value is determined by a basket of major currencies. Originally, the SDR was intended to serve as a shared currency for international reserves, though that aspect never really got off the ground.

These days, the SDR is mainly used in the IMF’s accounting for its transactions with member nations. Mr. Zhou suggested countries could increase their contributions to the IMF in exchange for greater access to a pool of reserves in SDRs.

Holding more international reserves in SDRs would increase the role and powers of the IMF. That indicates China and other developing nations aren’t hostile to international financial institutions — they just want to have more say in running them. China has resisted the U.S. push to make an immediate loan to the IMF because that wouldn’t give China a bigger vote. Ms. Hu said Monday that China, which encourages the IMF to explore other fund-raising options, would consider buying into a bond issue.

The IMF has been working on a proposal to issue bonds, probably only to central banks. Bond purchases are one way for the organization to raise money and meet its goal of at least doubling its lending war chest to $500 billion from $250 billion. Japan has loaned the IMF $100 billion and the European Union has pledged another $100 billion.

—Terence Poon in Beijing, James T. Areddy in Shanghai, and Bob Davis and Michael M. Phillips in Washington contributed to this article.
Write to Andrew Batson at andrew.batson@wsj.com
Printed in The Wall Street Journal, page A1
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