Socio-Economics History Blog

Socio-Economics & History Commentary

China Requests Reserve Currency Debate at G8

  • Some still hold to the view that the USD is safe as the world reserve currency. They cite comments by Chinese and Japanese government officials in support of the USD. What they don’t highlight is the simultaneous and strengthening negative comments by other Chinese officials. Will any Chinese official bash the USD outright and publicly when they are still stuck with US$ 2T ? Obviously not. Obfuscation is the methodology: saying Yes and No at the same time. They will attack the USD clearly only when they have largely disposed of their USD denominated holdings.
     
  • The case for the collapse of the USD is clear. It is heading towards the rubbish bin. The USDX (US Dollar Index) will test the 78 level and head towards the 72 level in the coming 1-2 months. When 72 is broken, it will likely head towards the 52 level.
     
  • Reuters reports :
      
    China has asked to debate proposals for a new global reserve currency at next week’s Group of Eight summit in Italy and the issue could be referred to briefly in the summit statement, G8 sources said on Wednesday. 
     
    One G8 source who was involved in the negotiations said China made the request during preparatory talks about a joint statement to be issued on the second day of the summit in L’Aquila by the G8 plus the G5 (Brazil, India, China, Mexico and South Africa) and also Egypt.
     
    This forum, the so-called “G14”, meets on July 9 to discuss the financial crisis, trade and climate change and for the first time a G8 summit will also produce a joint G14 statement.
     
    The euro EUR= surged around half a cent to session highs above 1.42 against the dollar immediately after the news. A European source with knowledge of preparations for the summit also said China had raised the subject of a reserve currency debate and that it might be mentioned during the meeting, though the source added: “Any country at the meeting can raise issues they see fit.”
     
    “But whether there is a specific mention in the communique remains open,” said the European source, adding that sherpas would discuss this further in preparatory talks on Friday.
     
    The debate centres on proposals by some emerging powers that an alternative should be found to the U.S. dollar as the global reserve currency, to reflect the shifting balance of power in the globalised economy.
     
    China has been particularly vocal. It holds more U.S. Treasury debt than any other country and has expressed fears that Washington’s huge spending on economic stimulus programmes could spark inflation, hurting the value of China’s dollar-denominated reserves.
     
    China’s central bank governor said in March the world should consider using the International Monetary Fund’s Special Drawing Rights (SDRs) as a super-sovereign currency. The SDR is an international reserve asset allocated to IMF members and its exchange rate is determined by a basket of dollars, euros, sterling and yen.
     
    Last month, Russian Finance Minister Alexai Kudrin even suggested that China’s yuan CNY=CFXS could become a world reserve currency. Russia is the world’s No. 3 biggest holder of foreign exchange reserves and has also expressed unease about the volatility of the dollar.
     
    But China’s proposal to use SDRs failed to gain ground after several world leaders, and officials from the IMF, backed the dollar as the global reserve currency.

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July 3, 2009 Posted by | Economics | , , , , , | Comments Off on China Requests Reserve Currency Debate at G8

Banksters Love Cap-and-Trade: Economic Collapse about to Accelerate !

  • So what is this big fuss about Cap and Trade. This is just another scheme to drive the world to one world government. Man made global warming is a hoax. Fluctuations in temperature are caused by our sun. Carbon dioxide emissions do not affect temperatures that much if at all. The fossil records show earth to be a much warmer, tropical place. Far more animals existed then than now.
     
  • So, who benefits from this? The Illuminati banksters that own the western world’s financial system and who intends to microchip everyone with 666. James Corbett reports :
     

    The well-placed and well-connected are set to make trillions off new climate bill
      
    The sweeping new bill which just passed the House last Friday, the Clean Energy and Security Act of 2009, is ostensibly about climate change, but it is in fact a bill of staggering economic ramifications that is going to accelerate the takeover of the economy by the well-placed financiers who have already plundered the Treasury and the Fed of $12+ trillion and counting. It was rushed through the House in the tradition of such nightmarish legislation as the Patriot Act and the banker bailout of last October: hundreds of pages were added to it at the last minute and it was humanly impossible for anyone to have read it before they voted on it. This, of course, is exactly what Obama promised his administration would never allow to happen, and for good reason; bills passed in this manner are always the result of fear and panic and inevitably results in legislation that would never be passed upon sober second thought.
     
    In this case, the rush to pass this new bill was an attempt to stop any scrutiny of a plan that is going to utterly transform the American economy, further centralize control of citizens’ lives in the hands of unaccountable federal bureaucrats and complete the transfer of the American economy from Main Street to Wall Street. And all of this in the name of fighting a threat which itself is a demonstrable fraud. In short, the banksters and bureaucrats are sharpening their knives, preparing to butcher what’s left of the carcass of the United States, and a good portion of the public are not only willing to allow it but are actually clamoring for it.
     
    The first thing that needs to be understood about the brand new trillion dollar carbon-trading commodities market that will be brought into existence if this bill passes the Senate is that it is a ripoff designed by and for the very corporate interests the environmentalists claim to be fighting. For an historical precedent of what is being proposed under this cap-and-trade scam one can look to Enron, which immediately found ways to plunder billions of dollars from
    new energy market legislation passed by the Clinton Administration in 2000. They gave schemes for manipulating billions of dollars out of Californians funny little names like Death Star and even went so far as to rig up a completely fake trading floor in their offices in order to bamboozle investors who were interested in the company’s remarkable success. They got away with it because they were The Smartest Guys in the Room, much brighter than the government bureaucrats who were supposed to stop them from committing such blatant fraud (assuming the regulators weren’t simply paid to look the other way). And now supporters of this new bill are putting their blind faith in these same bureaucrats to regulate a scheme to create a vastly more complex market with hundreds of times as much money at stake. Is it any wonder Enron was a booster for cap-and-trade?
     
    That the new carbon trading market can and will be manipulated by the very same financial oligarchs and government bureaucrats who have brought the world to the brink of economic Armageddon is laid bare in
    a must-read article by Matt Taibi in the latest issue of Rolling Stone. In “The Great Bubble Machine” Taibi meticulously documents how the amazingly well-connected Goldman Sachs has managed to manipulate and profit from every financial bubble since the Roaring Twenties and how they’re getting set to do it all over again with the creation of a carbon trading bubble:
     
    “The bank owns a 10 percent stake in the Chicago Climate Exchange, where the carbon credits will be traded. Moreover, Goldman owns a minority stake in Blue Source LLC, a Utah-based firm that sells carbon credits of the type that will be in great demand if the bill passes. Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Harris. Their business? Investing in carbon offsets. There’s also a $500 million Green Growth Fund set up by a Goldmanite to invest in green-tech … the list goes on and on. Goldman is ahead of the headlines again, just waiting for someone to make it rain in the right spot.”
     
    In effect, this bill creates an entirely new commodity that is guaranteed to generate ever-increasing profit for those who have already spent millions preparing to get in on the ground floor. Here’s a hint: that does not include your average mom and pop investor or your dual-income family struggling to make ends meet in a crashing economy. Here’s another hint: it does include financial juggernauts like Goldman Sachs who have been investing in solar, wind, and biofuels for years and now just happen to find themselves in the perfect position to start reaping vast profits from their headstart in the new carbon credit economy (and you thought Paulson was into going green for any other reason than making green?). It also includes Obama, who was instrumental in helping set up the Chicago Climate Exchange for his political cronies like Al Gore, who already has a company which he uses to buy carbon credits from himself and who had made multi-million dollar investments in companies developing carbon tracking software that will be essential to the new carbon-swindle economy.
       
    There are still those out there, however, who believe that this time it’s going to be different. This time the government is going to set up a new trillion dollar industry overnight, make sure it is regulated by angels of unquestionable integrity and goodwill, prevent it from being manipulated by big business, and create scores of new “green” jobs in the renewable energy industry (presumably to replace the hundreds of thousands of jobs that the economy is already hemorrhaging or the hundreds of thousands more that will be shed when these carbon taxes and penalties really ratchet up in the next decade). Well, let’s assume for a moment that we have crossed into just such a fantasy world. It still does not change the fact that the bill itself only offers phony solutions to a problem that doesn’t exist.
     
    The phony solution is the “Clean Energy” part of the Clean Energy and Security Act. What feelgood platitudes about pumping billions of dollars into solar, wind and alternative energy projects obscure is that throwing money hand over fist at inherently flawed technologies will not actually make them work, nor will it make the money-hungry charlatans who promote them any more honest. Just ask Albert Lanier. He’s a freelance journalist who has been writing a series of articles about First Wind, a Massachusetts-based wind developer that is currently being investigated by the New York Attorney General’s office. In a recent interview with The Corbett Report he revealed how the Mafia has been linked to the Italian wind farm industry, which might say more about the industry than it does about the mob.
     
    Of course, the entire idea of “cleaning” the atmosphere of carbon dioxide seems a bit ridiculous when you realize that by historical levels we are living in
    a CO2-starved environment, that global surface temperatures are dropping, that global ocean temperatures are dropping, that key proponents of the manmade global warming theory have been caught faking data to support their arguments, that Arctic sea ice is expanding, and that sea levels are not rising. But why let actual science get in the way of a good scare story, especially when that scare story can be used to create a new trillion dollar industry for the banksters?
     
     
    For those who cannot be convinced to consider an issue until it affects them personally, rest assured this draconian new legislation will reach into every American citizen’s living room…literally. As Congressman Steve Scalise has already pointed out, this “climate bill” contains within it a new national building code that supersedes all existing state codes. If enacted, this legislation will create an entirely new class of federally-funded green brigades with the mandate to perform house-to-house inspections to look for violations of this new “green” building code. They would even be able to impose civil penalties for code violations (like having the wrong windows or lightbulbs). Watch Congressman Scalise’s comments in the player above.
     
    This bill is not only unnecessary, it is dangerous. It is not only economically reckless, it is economically suicidal. It’s passage will be a particularly dark day in American legislative history, something almost unthinkable given the constitution-destroying atrocities passed during the Bush years. There is only one thing left for Americans to do: call their senators and let them know that it’s time to make a decision: vote against the Clean Energy & Security Act of 2009 or join the unemployment line come next election. 
     

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July 3, 2009 Posted by | Economics | | 2 Comments

Congressman Kucinich: Troop Movements Are Not a ‘Withdrawal’

  • Kucinich tells the truth. This is another sleight of hand by the White House. The American ruling elite intends to continue with wars and start more wars. Pakistan and North Korea come to mind. Georgian war will likely be re-started to distract the Russians while a greater middle east war is fought. America is essentially a war economy. This is the only sector that is growing apart from the government. This is all about corporate fascism, wars being fought for resources (oil) to feed corporate greed.
     
  • Over 1 million Iraqi civilians are dead because of American forces. Quite a few permanent military bases have been built in Iraq. Iraq has been ‘annexed’ unofficially in my opinion. Americans need to open their eyes to what the criminals in power are doing to their country and to other countries. Information Clearing House reports :
     
    Congressman Dennis Kucinich (D-OH) today made the following statement regarding the announcement that U.S. troops have left the cities and towns of Iraq and turned over formal security to Iraqi security forces.
     
    “The withdrawal of some U.S. combat troops from Iraq’s cities is welcome and long overdue news. However, it is important to remember that this is not the same as a withdrawal of U.S. troops and contractors from Iraq.
     
    “U.S. troop combat missions throughout Iraq are not scheduled to end until more than a year from now in August of 2010. In addition, U.S. troops are not scheduled for a complete withdrawal for another two and a half years on December 31, 2011. Rather, U.S. troops are leaving Iraqi cities for military bases in Iraq. They are still in Iraq, and they can be summoned back at any time.
     
    “This is not a great victory for peace. On May 19, the Christian Science Monitor reported that Iraqi and U.S. military officials virtually redrew the city limits of Baghdad in order to consider the Army’s Forward Operating Base Falcon as outside the city, despite every map of Baghdad clearly showing it with in city limits. In fact, according to Section 24.3 of the “SOFA” U.S. troops can remain at any agreed upon facility. The reported reason for this decision is to ensure U.S. troops are able to ‘help maintain security in south Baghdad along what were the fault lines in the sectarian war.’
     
    “This troop movement should not be confused with a troop withdrawal from Iraq. In reality, this is a small step toward Iraqi sovereignty as Iraqi security forces begin assuming greater control over security operations, but it is a long way from independence and a withdrawal of the U.S. military presence.” 
     
  • See also :
     
    Kucinich: ‘Another $106 billion and all we get is a lousy war’
    Major General Smedley Butler – War is a Racket !
    America: From Freedom to Fascism
    America – Why do We Fight ?
    Do Banksters and the Military Industrial Complex Rule the World ?
    What is the Unites States preparing in Pakistan?
    Exposing the Truth on NATO-US Agression against Yugoslavia
    Washington Plans Global NATO To Replace UN
    Confessions of an Economic Hit Man – John Perkins
    History of The New American Century
    Pentagon Preparing For War With The Enemy: Russia
    World is on the Brink of Disaster! On the Path to World War 3 ?

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July 3, 2009 Posted by | GeoPolitics | , , | Comments Off on Congressman Kucinich: Troop Movements Are Not a ‘Withdrawal’

China to Partially Lift Yuan Curbs for Foreign Banks

  • More steps are being taken to reduce China’s exposure to the USD. Allowing trade settlement in Yuan means reduce reliance on the USD. The writing is on the wall for USD. CNBC reports :
      
    Foreign banks will be able to buy or borrow yuan from Chinese mainland lenders for the first time to settle trade in Hong Kong and Macau under a pilot scheme steered by the central bank.
     
    The central bank chiefs of China and Hong Kong signed a memorandum on Monday, paving the way for the scheme, which analysts say is a step toward greater international use of the yuan.
      
    According to detailed rules published on Thursday by the People’s Bank of China, foreign banks settling imports and exports in yuan in Hong Kong and Macau will be allowed to buy Chinese currency from mainland banks within certain limits. The PBOC did not disclose the quotas, which it will set.
     
    The rules make clear that China will be checking to ensure that banks and companies do not try to use the pilot program to get round the country’s capital controls.
     
    To that end, any yuan loans must be supported by trade documentation. “Domestic settlement banks should take effective measures to know the nature and purpose of their clients’ trading,” the PBOC said.
      
    Exporters will be allowed to keep their yuan earnings outside China, according to the rules, which took effect on Wednesday. Chinese banks will also be allowed gradually to extend trade finance in yuan to overseas companies, the PBOC said.
     
    The program will initially be piloted by about 440 firms in Shanghai and the southern province of Guangdong, media reports have said. The PBOC statement said the rules would apply to a separate yuan-settlement trial between the Association of South East Asian Nations and the Yunnan and Guangxi regions in southern China. Chinese export firms involved in the trial will continue to qualify for export tax refunds.

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July 3, 2009 Posted by | Economics | , , , , , | Comments Off on China to Partially Lift Yuan Curbs for Foreign Banks

Jim Rogers: US Government Economic ‘Lying’ Statistics and Commodities Market

  • Jim Rogers explains why he distrusts the economic statistics coming from the Feds. He is still bullish on commodities. Gold is still in a bull market.

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July 3, 2009 Posted by | Economics | , , , , , | Comments Off on Jim Rogers: US Government Economic ‘Lying’ Statistics and Commodities Market