Socio-Economics History Blog

Socio-Economics & History Commentary

France Joins China, India and Russia in Calling for a New Reserve Currency !

  • So, France is joining BRIC in bashing the USD. I suspect that many other countries are also feeling the same way. It is just that you cannot piss on the sole superpower and think you can get away with it. I bet both South Korea and Japan are wondering when to bailout of the USD and openly support using the Chinese Yuan in trade settlement. It is fascinating: they are the 2 countries most threatened by North Korea and most in need of the sole superpower’s military support.
  • The Globe and Mail reports :
    The call to find an alternative to the U.S dollar as the global reserve currency is gaining momentum as France joined calls by China, India and Russia for a review of the world’s currency practices.
    French Finance Minister Christine Lagarde challenged the dollar’s supremacy “in a world that has changed because of the crisis and the growing role of emerging countries.”
    The questioning of the U.S. dollar as the key currency for central banks by a leader of a major European economy gives renewed life to the issue at this week’s Group of Eight summit meeting in L’Aquila, Italy. The U.S. dollar has long served as the dominant medium of exchange, and tends to dominate the official money reserves that countries hold through their governments and at their central banks.
    In the first quarter of 2009, 65 per cent of the world’s allocated foreign exchange holdings were held in U.S. dollars, according to the International Monetary Fund. That’s the highest in seven quarters.
    The push for an alternative is being driven in large part by concern over the weakened state of the U.S. economy. The country is forecasting fiscal deficits for the next decade.
    That’s leading large holders of U.S. debt such as China to worry that the U.S. dollar may not be as safe as it once was. In addition, the dollar has been volatile on international currency markets, and the U.S. is running ongoing trade deficits.
    Diversification would likely take years, because unwinding large reserve positions of U.S. dollars too quickly would devalue them. And despite concerns about the greenback, it has maintained its international appeal, in part because investors need the value of their U.S. dollar holdings to stay high.
    With the U.S. continuing to require willing lenders to fund deficits, the situation has become what top Barack Obama economic adviser Lawrence Summers once dubbed “a kind of balance of financial terror.”
    That U.S. Treasury bills appreciated in the immediate wake of the financial crisis was proof of the dollar’s strength, as “people fled to a stable place,” said Paul Wachtel, a professor at New York University.
    Still, the risk of a move away from the greenback is not without precedent, said Shaun Osborne, chief currency strategist of TD Securities. “The U.S. is a bit complacent about this. Most U.S. officials appear confident there will be no quick switch away from the dollar. But we have seen before, with the decline of the pound, that these things can happen quickly, in the space of years.”
    The Chinese central bank, the world’s largest external holder of U.S. debt, reiterated its call for a new international reserve currency in a policy review published last week. It has proposed an International Monetary Fund-created unit called Special Drawing Rights as an alternative reserve currency.
    Regardless of what happens at the G8 summit, some analysts expect a diversification in large countries’ currency practices. Alternatives like the euro, yen, Chinese yuan, and Special Drawing Rights all have drawbacks, said Benjamin Cohen of the University of California-Santa Barbara. “A more fragmented currency system seems in the offing, with much competition and no money clearly dominant,” Prof. Cohen said.


July 8, 2009 Posted by | Economics | , , , , | 1 Comment

Western Governments Funding Taliban & Al-Qaeda To Kill U.S. Troops, Destabilize Countries !

  • Truth matters, regardless of how painful it may be. The truth is: throughout history, governments have used false flag attacks, fear mongering and deceit to drive the populace to war. Wars are very rarely if ever just. The real reasons are seldom motivated by righteousness. Western governments may mask their intent with righteous rhetoric. But I am no fool to believe politicians are a bunch of saints. They are a bunch of self serving liars.
  • reports:
    Sunni terrorist groups armed, funded, and moved around the global chessboard to suit geopolitical agenda of Anglo-American establishment.
    Recent revelations concerning the U.S. importing Taliban members into Iraq to foster false flag terrorism is merely the tip of the iceberg when compared to the U.S. intelligence complex’s multi-decade history in sponsoring Sunni Al-Qaeda affiliated terrorist groups around the world.
    Wayne Madsen recently revealed how Taliban fighters were being imported from Afghanistan into Iraq to attack civilians and U.S. soldiers, as well as how Muqtada al-Sadr’s al-Mahdi Army was being allowed to import materials to make IEDs.
    However, this is just one aspect of how the U.S. has used terrorist groups as pawns on the global chessboard, moving them around the globe in line with their geopolitical objectives.
    As is voluminously documented, the U.S. first worked covertly with Osama Bin Laden and Al-Qaeda to fight the Soviets in Afghanistan from 1979-1989.
    Following this, the Al-Qaeda pawns were moved on to Bosnia shortly after the outbreak of war in 1992 to fight against Bosnian Serbs who were subsequently the target of NATO air strikes.
    Following the end of the war, “hundreds of Bosnian passports were provided to the mujahedeen by the Muslim-controlled government in Sarajevo,” according to Lenard Cohen, professor of politicalscience at Simon Fraser University. This all happened withthe approvalof the United Nations and the United States, who had brokered the peace deal to end the war.
    “They also set up secret terrorist training camps in Bosnia — activities financed by the sale of opium produced in Afghanistan and secretly shipped through Turkey and Kosovointo central Europe,”
    reports the National Post.
    Shortly before the NATO bombing of Yugoslavia in 1999, the Sunni terrorist groups moved into Kosovo, Serbia’s southern province, to aid the Kosovo Liberation Army, the Albanian terrorist faction that was being supported by the U.S. and NATO in its terror campaign against Serbs in the region.
    “The United States, which had originally trained the Afghan Arabs during the war in Afghanistan, supported them in Bosnia and then in Kosovo,” reports the Post.
    With the help of Bin Laden’s terror network,
    backed up by the U.S. and NATO, no less than 90% of Serbians were “ethnically cleansed” and forced to leave the region, while the international media played its role dutifully in portraying the Albanians as the “victims” of Serbian aggression.
    As Professor Michel Chossudovsky writes, “The fact of the matter is that the Atlantic Alliance had been supporting a terrorist organization. The KLA was not supporting the rights of ethnic Albanians. Quite the opposite. The activities of this terrorist organization on the ground, in Kosovo, provided NATO and the US with the pretext to intervene on humanitarian grounds, claiming that the Serb authorities had committed human rights violations against ethnic Albanians, when in fact the NATO sponsored KLA was involved in terrorist acts on behalf of NATO, which triggered a response from the Serb police and military.”
    Barely weeks before 9/11, former members of Al-Qaeda who had subsequently joined the Kosovo Liberation Army were airlifted out of Macedonia by U.S. paratroopers.
    As German sources reported,“Samedin Xhezairi, also known as Commander Hoxha, joined the Kosovo Liberation Army when armed conflict in Kosovo began, fighting in three operation zones. He was a fighter in Chechnya, trained in Afghanistan and acted as the commander of the Mujahideen 112th Brigade operating in the summer of 2001 in the region of Tetovo [Macedonia]. In August of the same year 80 members of the 3/502 battalion of U.S. paratroopers evacuated him from Aracinovo[Macedonia], together with his Albanian extremists and 17 instructors of the U.S. private military company MPRI which was training the Albanian paramilitary formations.”
    “In other words, the US military was collaborating with Al Qaeda, which according to the Bush administration was involved in the attacks on the WTCand the Pentagon. Yet, the US military was working hand in glove with “enemy number one” barely a few weeks before 9/11, and we are led to believe that the Bush administration is committed to waging a battle against Al Qaeda,” wrote Chossudovsky.
    Following the invasion of Afghanistan,
    MSNBC reported that in November 2001, hundreds of Taliban and Al-Qaeda fighters were rescued from Kunduzand flown out on Pakistani air force cargo planes. This could not have possibly happened without the approval of U.S. forces who had secured the region.
    With the U.S. now attacking targets in Pakistan under the pretext of going after the Taliban, the lineage of how this situation developed, with the U.S. moving their pawns around the globe at the most opportune times, can be clearly traced.
    All the more revealing therefore were the
    comments of Qari Zainuddin, a former Taliban leader who defected to the Pakistani government, alleging that the Taliban were senselessly attacking civilian targets and that they were working with U.S. and Israeli intelligence. A few days after he dropped this bombshell, Zainuddin was shot dead.
    Meanwhile, in Iran, A senior member of the Jundullah terrorist group confessed in an Iranian court case to being trained and financed by the U.S. and Israel.
    Jundullah is a Sunni Al-Qaeda offshoot organization that was formerly headed by alleged 9/11 mastermind Khalid Sheikh Mohammed.
    Under the 2007 program aimed at destabilizing Iran and fomenting regime change, the U.S. government is arming and bankrolling Jundullah to carry out terrorist attacks in Iran, such as the May bombing of a mosque in Sistan-Baluchestan which killed 25 people.
    In addition, the fingerprints of another U.S. sponsored terror group,
    Mujahedin Khalq Organization (MKO), which was formerly allied with Saddam Hussein in Iraq, have been found in the recent election unrest in Iran. In addition to supporting terror groups from Iraq, the Anglo-American establishment has also staged terror attacks, such as the February 2006 Samarra mosque bombing.
    And if there aren’t enough terrorists in supply, why not just dress up and pretend to be them? That’s what two
    British SAS members did when they were caught dressed in Arab garb with fake beards, driving a car full of explosives while shooting at Iraqi police officers in Basra in September 2005.
    After the SAS men were caught in the act and taken to jail, U.S. and British forces launched a rescue operation, blowing up half the prison and allowing 150 inmates to escape.
    All over the Middle East and the Balkans, from Afghanistan, to Bosnia, to Serbia, to Pakistan, to Iraq and to Iran, the United States, through black budget programs, has funded and armed Sunni Al-Qaeda terrorist groups to destabilize and topple regimes targeted by the Anglo-American establishment.
    This documented fact debunks the “war on terror” as a cruel hoax and exposes how current events in Afghanistan, Pakistan and Iran are being carefully orchestrated while the media sells the public on the belief that manufactured sock-puppet enemies, and not geopolitical domination and control of resources and the global drug trade, are why these wars are being fought, when in reality groups like Al-Qaeda and the Taliban are firmly in the pocket of the U.S. military-industrial complex.


July 8, 2009 Posted by | GeoPolitics | | Comments Off on Western Governments Funding Taliban & Al-Qaeda To Kill U.S. Troops, Destabilize Countries !

European Central Banksters Seek World Currency, Total Control


July 8, 2009 Posted by | Economics, EndTimes, GeoPolitics | , , , | 5 Comments

California is Effectively Defaulting on Its Debt

  • What happens in California will happen across America soon. Anywhere between 22-46 states will likely institute partial shutdown of state governments. Many services will be curtailed or scrapped. Many state employees will lose their jobs. This will cause a spiral of collapsing tax revenues, increase deficits and thus more shutdowns.
  • Governator Schwarzenegger’s plan of issuing IOUs (debts) to pay off debts is being slapped back by big banks. The Wall Street Journal reports:
    A group of the biggest U.S. banks said they would stop accepting California’s IOUs on Friday, adding pressure on the state to close its $26.3 billion annual budget gap.
    The development is the latest twist in California’s struggle to deal with the effects of the recession. After state leaders failed to agree on budget solutions last week, California began issuing IOUs — or “individual registered warrants” — to hundreds of thousands of creditors. State Controller John Chiang said that without IOUs, California would run out of cash by July’s end.
    But now, if California continues to issue the IOUs, creditors will be forced to hold on to them until they mature on Oct. 2, or find other banks to honor them. When the IOUs mature, holders will be paid back directly by the state at an annual 3.75% interest rate. Some banks might also work with creditors to come up with an interim solution, such as extending them a line of credit, said Beth Mills, a California Bankers Association spokeswoman.
    Meanwhile, on Monday morning, a budget meeting between Gov. Arnold Schwarzenegger and legislative leaders failed to produce a result. Amid the budget deadlock, Fitch Ratings on Monday dropped California’s bond rating to BBB, down from A minus, the latest in a series of ratings downgrades for the state.

  • For those of you who think California’s IOUs at 3.75% is a good deal, think again! DailyWealth has this to say :
    California is out of money. But it still must pay people. So it’s paying in “IOUs” instead of cash. By the end of this month, California will have handed out over $3 billion in IOUs. These IOUs are only supposed to last for a few months. And they pay a 3.75% annual interest rate.
    How will this end?
    Some investors are getting excited – they earn interest AND can potentially buy these IOUs at a discount to face value in exchange for cash.
    Me? I have no interest in these things. I’ve seen this exact game before… It happened in Argentina in 2001. The lesson was this: You don’t want to lend money for a tiny bit of interest to a broke state that has no problem changing its laws on you.
    In 2001, the province of Buenos Aires ran out of money. So it started issuing IOUs called “patacones” that paid 7% interest.
    Long story short, a U.S. dollar’s worth of patacones held in late 2001 were worth about 30 U.S. cents a year later at maturity, after the Argentine peso crashed. And that’s much better than money issued by other Argentine states… For example, the “federal” issued by the province of Entre Rios north of Buenos Aires was worth maybe 10 cents on the U.S. dollar a year later.
    Now, I don’t expect a repeat of Argentina’s crisis in the States. I don’t expect the California IOUs to fall to 30 cents on the dollar.
    At the same time, I’m not interested in giving cash today for a patacon, er, a California IOU that promises to pay me back at some future date with only a small amount of promised interest for my troubles.
    The government of California is broke. If you’re unfortunate enough to receive California “patacones” try to get rid of them. Use them to pay your taxes, sell them to the knuckleheads on Craigslist… do whatever you can.
    But don’t hold them. The historical record of broke governments issuing IOUs doesn’t offer much promise. The “reward” of 3.75% interest versus the risk simply isn’t worth it. Get rid of your California “patacones” if you get ’em…


July 8, 2009 Posted by | Economics | , , , , , | 1 Comment

Bank of Korea to Buy Gold for First Time in 11 Years

  • It is getting painfully obvious that foreign countries are exiting the USD. You cannot convince me that the world still believes the USD can continue as the reserve currency much longer. The East Asia Daily reports :
    The Bank of Korea has not purchased gold for 11 years, but is expected to go on a gold buying spree, as the world’s central banks have bought the commodity since the global economic erupted in September last year. 
    A Bank of Korea official said yesterday, “The bank has begun to set up a plan to manage foreign exchange reserves for next year. It has also closely watched central banks in other nations and trends in the global gold market. Given the changing global financial environment, the bank`s management plan is critical.”
    According to experts, the comment implies that the bank plans to buy gold soon. Korea has the world’s sixth most foreign exchange reserves but ranks just 56th in gold holdings.
    China, which has the world’s largest foreign exchange reserves, has secretly bought 454 tons of gold over the past six years. This has intensified global competition to obtain more gold.
    The amount of gold bought by China over the period is 32 times larger than the Bank of Korea`s gold reserves. The world’s central banks have rushed to buy gold since they believe the metal will replace the greenback when the dollar’s status as the world’s leading currency weakens.
    ○ Managing foreign exchange reserves in 2010
    The bank has said nothing officially, simply saying, “We have made no decision on the purchase of gold and cannot say if we have considered it.” It will finalize by November its plan to manage foreign exchange reserves for 2010, but experts forecast that the bank will have no choice but to buy gold soon.
    Based on its explanation, the central bank is apparently fearful that its management plan could cause trouble in the global financial market and harm national interests.
    Chang Min, the head of the Korea Institute of Finance’s macroeconomic research division who worked at the central bank until late last year, said, “The central bank has long considered several alternatives such as buying gold to diversify its foreign exchange reserve portfolio, which is heavily focused on dollars. It needs to secure more gold to diversify its investment.”
    Kwon Sun-woo, the head of macroeconomic research at Samsung Economic Research Institute, said, “The Bank of Korea`s gold reserves are far less than enough. It should have bought more gold. Given the instability of the greenback, it needs to buy more gold.”
    ○ Lagging badly in gold reserve volume
    As of late May this year, the Bank of Korea had 14.3 tons of gold, far less than that held by its counterparts in the United States (8,134 tons); Germany (3,413); China (1,054); Japan (765); Russia (537); Taiwan (424); the Philippines (154); Singapore (127); Thailand (84); Indonesia (73); and Malaysia (36 tons).
    Worse, Korea is one of the world`s worst in the share of gold in its foreign exchange reserves — 0.19 percent by market price and 0.03 percent by book value.


July 8, 2009 Posted by | Economics | , , | Comments Off on Bank of Korea to Buy Gold for First Time in 11 Years