End Times

May 19, 2010

IMF still prefers its two ideas for global bank tax

Filed under: One World Goverment — Steven @ 3:34 am

MILAN (Reuters) – The IMF still favours either a form of international deposit insurance levy or a tax on financial institutions’ profits and remuneration as ways of preventing a repeat of the financial crisis, a senior official said on Monday.

Business  |  G20

Amid intense public anger at banks in many developed countries, the multilateral lender has been asked to prepare proposals for a summit of G20 leaders next month in Canada on how to make banks pay for a bailout that cost hundreds of billions of dollars.

But when the IMF’s put its initial proposals for the two levies before a G20 meeting in April they proved controversial.

While countries that had experienced severe problems, such as Britain, were committed to taking action, others such as Canada, whose banks passed through the 2007-2008 financial crisis without government assistance, oppose a blanket tax.

To allay concerns that a global bank tax might punish banks that performed well during the global crisis, the G20 told the IMF to consider “individual countries’ circumstances.

The IMF has said the deposit insurance option, dubbed a “financial stability contribution,” could be a simple levy on a selected set of balance sheet variables, but could be fine-tuned to weigh more heavily on firms that pose larger systemic risk.

Carlo Cottarelli, director of the International Monetary Fund’s fiscal affairs department, told reporters the Fund did not like the idea of a financial transaction tax or “Tobin Tax,” which is widely believed to be distortive and easily avoided.

He said the IMF still broadly favoured the two methods presented in April: a levy “similar to deposit insurance to insure the liabilities that are not covered at the moment,” and a financial activity tax, “which would be a tax on profits and remuneration in the financial sector.”

Some economists have questioned whether broadening deposit insurance could lead to increased “moral hazard” in the banking system by encouraging investors to ignore default risk.

The bank levy is part of a regulatory response aimed at addressing the circumstances that led to the global crisis, including stricter regulation of derivatives, hedge funds and ratings agencies, closer attention to bank capital ratios and liquidity and renewed discussion of global financial imbalances.

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October 9, 2009

Barroso fears powerful ‘European president’

Filed under: One World Goverment — Steven @ 1:43 am

The EU’s Lisbon Treaty has raised a whole series of questions about external representation (Photo: ec.europa.eu)

EUOBSERVER / BRUSSELS – European Commission President Jose Manuel Barroso has sided with smaller member states in trying to restrict the role of the proposed president of the European Council, a new post created by the Lisbon Treaty.

Addressing the European Parliament on Wednesday (7 October), Mr Barroso chastised MEPs for referring to the post as “president of Europe.”

“I am sorry, there will not be a president of Europe. There will be, if we have Lisbon, the president of the European Council. It is important to understand that point because sometimes I think there are some ideas about certain derives institutionelles [institutional drifts],” he said.

Loosely defined in the treaty itself, talk about the nature of the president’s role has become one of the main topics in Brussels in recent days, as national governments deliberate whether the post should go to a well-known personality from a big country or a more discreet politician.

The exact job description will be written by the first person holding the job, with ex British prime minister Tony Blair among the most-mentioned candidates for the post. It is widely agreed that a politician of Mr Blair’s standing would take the post far beyond the largely administrative role foreseen in the treaty.

According to the treaty, which is still awaiting full ratification by all 27 member states, the president is supposed to chair the regular meetings of EU leaders – known as the European Council – and to drive forward their work.

Mr Barroso, who himself enjoys attending international summits on behalf of the EU, has a personal stake in the issue.

A powerful council president would upset the power balance in the EU and would likely see Mr Barroso relegated to a more much Brussels-based role.

The commission president has no formal powers in appointing the European Council president but he warned: “The European Commission will not accept the idea that the president of European Council is the president of Europe.”

Mr Barroso’s remarks came shortly after a leaked paper on the new Lisbon Treaty posts by Belgium, the Netherlands and Luxembourg underlined the importance of maintaining the “institutional balance” of the union. The paper has been interpreted in some quarters as an anti-Blair move.

Poland has also prepared a document on the role of the president of the European Council. Earlier this week, Polish Europe minister Mikolaj Dowgielewicz indicated to EUobserver the limited role that Warsaw foresees for the new president.

“We have to recognise that the Polish minister of finance or agriculture will only take instructions from his prime minister. He will not take instructions from the president of the council,” he said.

Some member states, such as France, have indicated they want to create a major player with the presidential job by appointing someone who can open doors in the US and China and who can give the EU some gravitas on the world stage.

Mr Blair’s is not the only name that has been put forward in connection to the job. Other possible contenders mooted include Dutch leader Jan-Peter Balkenende; Luxembourg leader Jean-Claude Juncker and Felipe Gonzalez, a former Spanish prime minister.

October 8, 2009

The demise of the dollar

Filed under: One World Goverment — Steven @ 5:22 am

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China’s former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. “Bilateral quarrels and clashes are unavoidable,” he told the Asia and Africa Review. “We cannot lower vigilance against hostility in the Middle East over energy interests and security.”

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region’s conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. “One of the legacies of this crisis may be a recognition of changed economic power relations,” he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China’s extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America’s power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China’s growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China’s reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America’s trading partners have been left to cope with the impact of Washington’s control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. “The Russians will eventually bring in the rouble to the basket of currencies,” a prominent Hong Kong broker told The Independent. “The Brits are stuck in the middle and will come into the euro. They have no choice because they won’t be able to use the US dollar.”

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years’ time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

“These plans will change the face of international financial transactions,” one Chinese banker said. “America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.”

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

So our 1,000 years of history ends like this

Filed under: One World Goverment — Steven @ 4:42 am

 

 

The creation of a European superstate has moved a step closer, after the Irish people voted to accept the Lisbon Treaty, paving the way for a powerful new President of Europe.

In a result greeted with relief in Downing Street and dismay in the Tory Party, more than two-thirds of the Irish electorate voted Yes in the country’s second referendum on the treaty.

The ballot, hailed by European Commission President Jose Manuel Barroso as ‘a great day for Ireland and for Europe’, followed a frantic campaign by pro-Europeans to reverse Ireland’s overwhelming No vote last year. Now, only Poland and the Czech Republic of the EU’s 27 countries have yet to approve it.

Critics say the treaty, which aims to ‘streamline’ EU institutions to mimic the functions of a nation state, represents the biggest threat to British sovereignty since the invasion of William the Conqueror in 1066.

Tony Blair is strongly tipped to be anointed as the new European President, possibly within weeks, creating a headache for David Cameron as he heads to Manchester for his party conference.

The Conservative leader says a Tory Government would hold a British referendum on the treaty if it had not been fully ratified when the party came to power, but refuses to be drawn on what its position would be if the treaty was already in force.

Here Peter Hitchens looks at why the Irish changed their minds and considers the threat the new European superstate presents to Britain…

Frightened for their jobs, no longer confident in their ability to govern themselves, the Irish finally surrender to Europe. But at least they were allowed a vote

By Peter Hitchens In Dublin

So, out of the smog of dishonesty that has long concealed it, we at last see the true shape of the thing that threatens us.

A great grey Tower of Babel reaches up into the sky over Europe, lopsided, full of cracks and likely to collapse in the fullness of time. But unlike the mythical original, it is complete – even though its builders neither understand nor particularly like each other. 

'Yes' vote supporters celebrate at Dublin castle‘Yes’ vote supporters celebrate at Dublin castle

The new European State finally exists and has given itself life – life of a rather Frankenstein sort, but life all the same. 

It no longer needs to ask the permission of its member states to act. Ireland, for instance, will no longer be able even to hold a referendum on increased EU central powers.

It has what is called a ‘legal personality’, so will not need to make future changes by treaty but by acting as the superstate it now is.

Increasingly, the provinces of Europe, which until today were countries, will need its
permission to exist at all.

That passport you hold is not British, but European. You are a European citizen. British Embassies abroad are European Embassies – as they already show by flying the EU’s meaningless and tasteless blue and yellow dishcloth.

Shouldn’t somebody have pointed out that in the recent history of the Continent, yellow stars call up only one dismal image, the mass murder of Europe’s Jews? 

yes supporterStep forward: Ireland has now paved the way for EU reform

 

Brian CowenRelieved: Irish PM Brian Cowen welcoming the approval yesterday

Anthony Blair, who wrecked his own political party and irreparably damaged Britain in the pursuit of global ideals, is considered a fit person to be the appointed President of this strange new superpower, precisely because he is unfit to lead his own country.

David Cameron claims that he is somehow able to exempt Britain from all these forces by holding a referendum on a treaty this country has already ratified.

But what will he do if we vote ‘No’? Does he think we are not subject to the forces that have compelled Ireland to hold the poll again?

Amid all the fuss about London’s grandiose new Supreme Court, nobody has seen fit to mention that Britain’s real Supreme Court, the European Court of Justice – now sits in Luxembourg. 

For most of its members, accustomed to dictatorship, partition, subjugation, occupation, invasion and domination by bigger neighbours, this sort of thing will be familiar. In many ways it will be preferable.

In living memory, their frontier posts were demolished by sneering soldiers and their capitals forced to watch parades of other people’s tanks.

Now, the same frontier barriers are dismantled by unequal treaties, and their currencies replaced by the euro. Nobody dies, though much is lost. 

yes supportersSecond time lucky: Yes supporters enjoy the victory at Dublin Castle

 

A supporter of 'Ireland For Europe' celebratesOverwhelming: A supporter of ‘Ireland For Europe’ celebrates

For Britain, Europe’s oldest continuously independent sovereign state, it
is entirely different. It is the end of 1,000 years of history, as predicted by the Labour leader Hugh Gaitskell as long ago as 1962.

What about Ireland, which still lovingly and proudly preserves the bullet marks on Dublin buildings from the Easter Rising against British rule in 1916? How strange that the last gasp of national sovereignty should happen in this odd, quiet way on a wet and windy morning, here of all places.

With a national sigh of resignation, the Irish people have said not so much ‘Yes!’ as ‘Oh, very well then, if you absolutely insist’ to their absorption in the strangest empire the world has ever seen.

It is a realm without a throne, ruled by stifling regulation and dull secret committees rather than by a crowned despot. It is supposedly a club of happy equals but actually dominated by a single great power – Germany – whose importance nobody dares to mention, precisely because it is so important.

It is fitting, in a way, that it should be Ireland, which long defined itself as a nation of rebels against its mighty neighbour, that should have held out to the end.

This was never because Ireland’s current generation of leaders wanted
a fight. On the contrary, the Irish political class sprawls luxuriously on great cushions of Euro-money and have long enjoyed their status as the favoured pet of Brussels.

It is only because of the Republic’s cunningly drafted and thrillingly fair constitution that the people of Ireland have been allowed to vote on the matter at all.

And I think it true to say that the first vote, when they said ‘No’ 15 months ago, expressed the real opinion of the Irish people, who have never liked being pushed around by outsiders.

balloonsBacking: The Irish passed the Lisbon Treaty Referendum by over 60 per cent

Remember that they did so in spite of the fact that the entire political establishment and the huge bulk of the Irish media were hot for a ‘Yes’ vote.

Rather enjoyably, but quite consistently, the anti-British militants of Sinn Fein were among the few organisations who argued for ‘No’.

After all, why go to such lengths to expel the British Crown, only to end up as a remote and bought-off province under the Crown of Charlemagne?

At least the British, for all their faults, were actually interested in Ireland, share a language and a culture and much of their history. 

In the EU, Ireland – no longer a Tiger – takes its place alongside Slovenia and Lithuania as a quirky, minor possession on the damp and unvisited fringes of the Continent, with almost no voting power.

Shorn – as it is now – of its ability to get in the way, it may find that the flow of subsidies will become much thinner in years to come.

The ‘Yes’ campaign has been based, blatantly, on a call to cling to nurse, for fear of finding something even worse. And with reason. Ireland’s economic crisis is so bad that they envy Britain’s relatively solvent state.

Without EU help, they would be worse off than Iceland. And they know it.

Even with EU help, the public sector is unsustainable, overspending by £20billion a year, and the private sector shrivelling in the blast of bankruptcy and negative equity. 

Anti-Lisbon Treaty protesters in PragueUnhappy: Anti-Lisbon Treaty protesters in Prague yesterday

Last week, when Marks & Spencer advertised in Dublin for short-term Christmas staff, an enormous queue of respectable, well-dressed and quietly desperate people formed outside the hiring office.

Slogans such as ‘Vote Yes for jobs’, plastered all over the city, conceal
a deeper message that Ireland no longer believes two things.

One, it no longer believes that it can govern its own economy and take responsibility for ensuring its own people have jobs; and two, it no longer values its independence so highly that it is prepared to suffer for it – as it certainly was in the thin, cold pinched days of the Twenties and Thirties.

The ideal of a very Irish, very Catholic state, proudly separate and honestly poor, no longer appeals in the era of Sex And The City.

I suspect a lot of people share the view of Fionnuala Maher, who told the Irish Times that she remembered Ireland before it joined the EU in 1973. ‘It was a terrible place,’ she said. ‘If we don’t have Europe, we don’t have a bloody hope.’ 

European Commission President Jose Manuel Barroso yesterdayEuropean Commission President Jose Manuel Barroso yesterday

For such people, the EU is completely identified with the personal liberation and individualism that in Britain is linked with the Sixties cultural revolution.

That may be a mistake. The ascent of the EU happened to coincide with several decades of unheard-of prosperity and growth. But the EU did not cause that prosperity, though it claims to have done so.

It was based on American Marshall Aid and helped along by American and British willingness to spend heavily on defending Europe against the USSR, while most of the EU nations kept their military budgets small.

Stage set for Blair to be President of Europe

The Lisbon Treaty will create the powerful new post of EU president – with Tony Blair widely expected to be the first to hold the job. The document has been condemned as a blueprint for a European superstate and a thinly disguised version of the European Constitution abandoned just four years ago.

It creates the unprecedented situation where a single politician will represent Europe around the world. So far, each member state has taken it in turns to hold the EU presidency on a rotating basis. But the new position, with an expected salary of £270,000, raises the spectre that an incoming Tory Government under David Cameron would be eclipsed on the world stage by a ‘President Blair’ with avowedly pro-European views.

The Lisbon agreement will also establish a powerful new role of EU foreign ‘High Representative’ to act for Brussels on foreign policy and security issues. This will trigger fears that Brussels is building its own diplomatic network.

Amid further worries that the treaty represents another step to a European superstate, it will make further restrictions on countries’ abilities to veto EU proposals. The agreement scraps the national vetoes in new areas including criminal justice laws – although the Foreign Office claims that Britain can still block any EU criminal justice reforms it does not like.
In another move, the treaty also strengthens the rights of trade unions by incorporating the Charter of Fundamental Rights into EU law. The UK has negotiated an exemption but critics fear the opt-out will be given up in future concessions. Crucially, the treaty also raises fears that UK laws will be entirely subservient to European courts  through the provision that gives the EU a full legal status or ‘legal personality’ for the first time.

The EU also cannot guarantee that Europe’s prosperity will go on forever. With so many member nations, many of them devastated by decades of Marxist misrule, its capacity to hand out subsidies is running out.

The credit crisis has not finished yet, Western Europe is fast running out of its own energy supplies and the shift of economic power to the Far East is speeding up, not stopping.

The European nations have not worked out how to deal with the enormous Muslim minorities which they have encouraged to settle on their territory and which increasingly demand the right to live according to their traditions.

Nor can they stop the slide of the manufacturing industry towards the regions where labour is cheapest.

Germany, still in a sort of post-traumatic shock over the cost of absorbing the Communist East, may not forever be willing to share a currency – and so a joint bank account – with the poorer and less well-run nations of the Eurozone.

The remnants of Yugoslavia are turning out to be much harder to absorb than anyone thought. Russia, sick of being pushed around, has made it aggressively clear that it wants no more Western interference along its borders, and will bite hard if crossed. Turkey, fobbed off for decades with promises of membership, may turn very nasty indeed if – as is likely – the pledge is broken.

The moment of political unity, schemed for since the Rome Treaty in 1957, comes just as all the old problems of the European Continent, economic, political, religious and social, begin to re-emerge in new and tricky shapes.

We in Britain, like Ireland, have constantly been warned that by staying out we would miss the European train – always depicted as a luxury express bound for a pleasant destination and more or less under our control.

Now, as the whistle blows, the doors are locked and the Eurotrain at last jolts out of the station, we look around us and see threadbare seats and through grimy windows glimpse an unfamiliar and unpleasant landscape, and when we ask where we are going, the crew tell us that from now on, that is their business, not ours.

September 23, 2009

U.S. to push for new economic world order at G20

Filed under: One World Goverment — Steven @ 5:29 am

WASHINGTON (Reuters) – The United States will urge world leaders this week to launch a new push in November to rebalance the world economy, but there are doubts national governments will bow to external advice.

A document outlining the U.S. position ahead of the September 24-25 Group of 20 summit in Pittsburgh said exporters, which include China, Germany and Japan, should consume more, while debtors like the United States ought to boost savings.

“The world will face anemic growth if adjustments in one part of the global economy are not matched by offsetting adjustments in other parts,” said the document, which was obtained by Reuters on Monday.

The framework drafted by U.S. policy makers foresaw analysis of G20 members’ economic policies by the International Monetary Fund to figure out if they were consistent with better balanced growth.

“We call on our finance ministers to launch the new framework by November,” the document said, signaling a determined effort to maintain momentum for change created by last year’s global financial crisis.

The United States envisages the IMF playing a central role in a process of “mutual assessment” by making policy recommendations to the G20 every six months.

Finance ministers and central bankers from the G20 countries are due to meet November 7-8 in Scotland.

European Central Bank President Jean-Claude Trichet said persuading Europe, the United States and China to accept IMF advice on economic policy may be difficult. In the past, many countries have ignored suggestions the IMF dished out in regular reviews.

Trichet told French newspaper Le Monde the G20 had made progress on reforms to make the financial system more stable after the crisis.

“The most difficult question is still open: Europe, America, China, are they ready to modify their macroeconomic policies in the future — by following the advice of the IMF and under pressure from their peers, for the common good, and world economic stability?” he said in the piece on Monday.

G7 sources told Reuters there was a renewed determination to cooperate because the crisis had driven home the interconnected nature of the global system. That said, governments would not allow themselves to be told what to do.

“We can’t get to a situation where any country is giving up its own decision-making,” said one source, who spoke on the condition of anonymity.

Germany, a major exporter to the United States, was singled out on Sunday by U.S. President Barack Obama as a country that, like China, exports a lot but does not buy much back.

But a top European Union official said that the euro zone, where 16 countries share a common currency, had to act as a collective.

“It is difficult to think about one country without taking into consideration what is the impact in the euro area,” European Commission President Jose Manuel Barroso told reporters in New York.

Taxpayer money to the tune of $5 trillion has been pumped into the world economy to keep it from seizing up since the beginning of the crisis last September.

G20 leaders will maintain that pace of stimulus while acknowledging that at some point it will have to be wound down, the document said.

But, mindful of how a disorderly rush to raise interest rates could roil world markets again, they will also ask finance ministers to thrash out a “transparent and credible” exit strategy.

There were no details of how to achieve this in practice, but the document echoed the caution of G20 finance ministers at their meeting in London earlier this month acknowledging the pace of change would vary by country.

Simon Johnson, a former chief economist at the IMF, warned there was a risk the Pittsburgh summit would be an empty public relations exercise.

“The point of the meetings is to try to reassure themselves and everyone else that they’re broadly on track and have a round of applause and some back patting,” he said.

But John Bruton, the EU ambassador to Washington, said it was important not to ignore the summit’s symbolic power.

“I think we’re seeing the beginning of a conversation between world leaders,” he told Reuters in an interview

September 11, 2009

UN wants new global currency to replace dollar

Filed under: One World Goverment — Steven @ 2:56 am

The dollar should be replaced with a global currency, the United Nations has said, proposing the biggest overhaul of the world’s monetary system since the Second World War.

Crumpled dollar bill - UN wants new global currency to replace dollar

A number of countries, including China and Russia, have suggested replacing the dollar as the world’s reserve currency

In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises.

It added that the present system, under which the dollar acts as the world’s reserve currency , should be subject to a wholesale reconsideration.

Although a number of countries, including China and Russia, have suggested replacing the dollar as the world’s reserve currency, the UNCTAD report is the first time a major multinational institution has posited such a suggestion.

In essence, the report calls for a new Bretton Woods-style system of managed international exchange rates, meaning central banks would be forced to intervene and either support or push down their currencies depending on how the rest of the world economy is behaving.

The proposals would also imply that surplus nations such as China and Germany should stimulate their economies further in order to cut their own imbalances, rather than, as in the present system, deficit nations such as the UK and US having to take the main burden of readjustment.

“Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability,” said Detlef Kotte, one of the report’s authors. “But you will also need a system of managed exchange rates. Countries should keep real exchange rates [adjusted for inflation] stable. Central banks would have to intervene and if not they would have to be told to do so by a multilateral institution such as the International Monetary Fund.”

The proposals, included in UNCTAD’s annual Trade and Development Report , amount to the most radical suggestions for redesigning the global monetary system.

Although many economists have pointed out that the economic crisis owed more to the malfunctioning of the post-Bretton Woods system, until now no major institution, including the G20 , has come up with an alternative.

June 3, 2009

Dollar declines as nations mull reserve currency alternative

Filed under: One World Goverment — Steven @ 2:58 am

June 2 (Bloomberg) — The dollar weakened beyond $1.43 against the euro for the first time in 2009 on bets record U.S. borrowing will undermine the greenback, prompting nations to consider alternatives to the world’s main reserve currency.

The euro gained for a fourth day versus the dollar as the Russian government said emerging-market leaders may discuss the idea of a supranational currency. The pound rose to the highest level since October and the Canadian dollar traded near an eight-month high on speculation signs of a recovery in U.S. and U.K. housing will spur higher-yield demand.

“There’s been a lot of talk out of Russia about a new global currency, and that’s contributing toward this latest bout of dollar weakness,” said Henrik Gullberg, a currency strategist in London at Deutsche Bank AG, the world’s largest currency trader. “These latest comments are just adding to the general dollar weakness we’ve seen recently.”

The dollar slid 1.1 percent to $1.4317 per euro at 4:21 p.m. in New York, from $1.4159 yesterday. It touched $1.4331, the weakest level since Dec. 29. The dollar depreciated 1.1 percent to 95.54 yen, from 96.59. The euro traded at 136.77 yen, compared with 136.78.

Sterling rose as much as 0.9 percent to $1.6596, the highest level since Oct. 30, while the Canadian dollar advanced 1.2 percent to C$1.0806, near the strongest level since Oct. 3.

Pending sales of existing homes in the U.S. climbed 6.7 percent in April, the National Association of Realtors said today. The median forecast of 32 economists surveyed by Bloomberg News was for a 0.5 percent gain. Banks in the U.K. granted 43,201 home loans that month, the highest level in a year, the Bank of England said.

Russia on Currency

Russian President Dmitry Medvedev may discuss his proposal to create a new world currency when he meets counterparts from Brazil, India and China this month, Natalya Timakova, a spokeswoman for the president, told reporters by phone today. Russia’s proposals for the Group of 20 meeting in London in April included studying a supranational currency.

“We need some kind of universal means of payment, which could create the basis of a future international financial system,” Medvedev said in a June 1 interview with CNBC. “Naturally, because of the crisis in the American economy, attitude to the dollar has also changed.”

Regional reserve currencies are an “unavoidable” part of “regionalizing” the global financial system, Deputy Finance Minister Dmitry Pankin said in Moscow today.

The Dollar Index, which ICE uses to track the currency’s performance against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, fell as much as 1 percent to 78.33, the lowest level since Dec. 18.

‘Opportunity to Sell’

“The market is looking for the opportunity to sell the U.S. dollar,” said Jack Spitz, a managing director for foreign exchange at National Bank of Canada in Toronto. “It took decades for the euro to be established. I can only imagine how long it would take for the BRIC countries to put together a currency.”

There’s no replacement currency for the dollar in the short term, Guo Shuqing, former head of China’s foreign-exchange administrator, said in an interview with the Financial Times for an article published yesterday.

The Dollar Index reached 89.62 on March 4, the highest level since 2006, as the global recession spurred investors to take refuge in Treasuries notes and bills.

Demand for the record amount of debt the U.S. is selling will remain sufficient, Treasury Secretary Timothy Geithner said in an interview today with state media outlets in China.

Chinese ‘Understanding’

The Chinese have a “very sophisticated understanding” of why the U.S. government is running up deficits, said Geithner in Beijing, pledging to rein in borrowing later. The U.S. will “do everything that is necessary” to preserve confidence in the nation’s financial markets, he said.

The dollar also declined on speculation “smaller” central banks started today’s selling of the greenback, said Sebastien Galy, a currency strategist at BNP Paribas SA in New York.

“If people believe that there is official pressure behind it, then obviously it puts pressure on euro-dollar on the upside,” Galy said. “Small central banks have an incentive in doing something because if they’re the first movers, they will not suffer by far as much as the big ones.” Galy predicted the euro may reach $1.4360 today, a peak last reached in December.

The euro fell earlier versus the yen as Europe’s jobless rate rose in April to the highest level in almost 10 years. Unemployment in the 16-member euro region increased to 9.2 percent from 8.9 percent in March, the European Union statistics office in Luxembourg said today.

ECB’s Rate

The European Central Bank will keep its benchmark rate unchanged at 1 percent on June 4, according to the median forecast of 54 economists surveyed by Bloomberg News. The ECB said last month it would buy 60 billion euros ($86 billion) of covered bonds.

The euro’s rally against the dollar may be entering its “last stage,” and investors would likely benefit from selling the euro against the greenback, according to UBS AG, the world’s second-biggest foreign-exchange trader.

Europe’s currency is poised to weaken toward $1.30, analysts led by Mansoor Mohi-uddin, Zurich-based chief currency strategist at UBS, wrote in a note to clients yesterday. The analysts reiterated forecasts for the euro to trade at $1.40 in one month’s time and then drop.

“We remain positive on the U.S. dollar and think that the greenback is likely in its final stage of weakness,” the analysts wrote. “Equity and bond flows have the potential to surprise and could lend support to the dollar.”

May 23, 2009

Blair: I’ll be president of Europe if you’ll give me the power

Filed under: One World Goverment — Steven @ 1:44 am

http://www.youtube.com/watch?v=R_l5jCvsMNk

May 20, 2009

Brazil and China eye plan to axe dollar

Filed under: One World Goverment — Steven @ 12:51 am

 

Brazil and China will work towards using their own currencies in trade transactions rather than the US dollar, according to Brazil’s central bank and aides to Luiz Inácio Lula da Silva, Brazil’s president.

The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency.

Mr Lula da Silva, who is visiting Beijing this week, and Hu Jintao, China’s president, first discussed the idea of replacing the dollar with the renminbi and the real as trade currencies when they met at the G20 summit in London last month.

An official at Brazil’s central bank stressed that talks were at an early stage. He also said that what was under discussion was not a currency swap of the kind China recently agreed with Argentina and which the US had agreed with several countries, including Brazil.

“Currency swaps are not necessarily trade related,” the official said. “The funds can be drawn down for any use. What we are talking about now is Brazil paying for Chinese goods with reals and China paying for Brazilian goods with renminbi.”

Henrique Meirelles and Zhou Xiaochuan, governors of the two countries’ central banks, were expected to meet soon to discuss the matter, the official said.

Brazil: Exports to ChinaMr Zhou recently proposed replacing the US dollar as the world’s leading currency with a new international reserve currency, possibly in the form of special drawing rights (SDRs), a unit of account used by the International Monetary Fund.

In an essay posted on the People’s Bank of China’s website, Mr Zhou said the goal would be to create a reserve currency “that is disconnected from individual nations”.

In September, Brazil and Argentina signed an agreement under which importers and exporters in the two countries may make and receive payments in pesos and reals, although they may also continue to use the US dollar if they prefer.

An aide to Mr Lula da Silva on his visit to Beijing said the political will to enact a similar deal with China was clearly present. “Something that would have been unthinkable 10 years ago is a real possibility today,” he said. “Strong currencies like the real and the renminbi are perfectly capable of being used as trade currencies, as is the case between Brazil and Argentina.”

In what was interpreted as a sign of Chinese concern about the future of the dollar, the governor of China’s central bank proposed in March that the US dollar be replaced as the world’s de-facto reserve currency.

In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency ”that is disconnected from individual nations” and modelled on the International Monetary Fund’s special drawing rights, or SDRs.

Economists have argued that while the SDR plan is unfeasible now, bilateral deals between Beijing and its trading partners could act as pieces in a jigsaw designed to promote wider international use of the ­renminbi.

Any move to make the renminbi more acceptable for international trade, or to help establish it as a regional reserve currency in Asia, could enhance China’s political clout around the world.

April 9, 2009

Chavez in China Touts ‘New World Order’

Filed under: One World Goverment — Steven @ 5:54 pm

BEIJING –Venezuelan President Hugo Chavez said his two-day visit to Beijing this week is part of the creation of a “new world order.”

The frequent U.S. critic told reporters that power in the world is shifting from America to countries such as Iran, Japan and China.

[Venezuelan President Hugo Chavez and Chinese President Hu Jintao] Reuters

Venezuelan President Hugo Chavez (left) shakes hands with Chinese President Hu Jintao during their meeting at the Great Hall of the People in Beijing.

“We are creating a new world, a balanced world. A new world order, a multipolar world,” Mr. Chavez said on arriving in China the evening before a scheduled Wednesday meeting with China’s president and Communist Party leader Hu Jintao.

“The unipolar world has collapsed. The power of the U.S. empire has collapsed,” he said. “Everyday, the new poles of world power are becoming stronger. Beijing, Tokyo, Tehran .. It’s moving toward the East and toward the South.”

Mr. Chavez has made Beijing a frequent stop in his global travels to promote his agenda of anti-American world unity, stopping in the Chinese capital no less than six times since rising to power in 1998 elections.

His visit follows a sweep through the Middle East last week, including a stop in Iran where he said that he has little hope of better relations with Washington under President Barack Obama because the United States was still acting like an “empire” in his eyes.

China’s communist leaders have been low-key in response to Mr. Chavez’s political rhetoric. But Beijing’s state-run industries have been eager to use Venezuela as a jumping-off point for their entry into South America. Chinese companies in the mining and petroleum sector have been especially keen on securing South American mineral resources.

Mr. Chavez said he plans to review with Chinese leaders a goal of boosting exports of Venezuelan oil to China from 380,000 barrels last year to 1 million barrels by 2013 – part of Venezuela’s strategy of diversifying oil sales away from the United States, which buys about half the South American nation’s heavy crude despite political tensions.

The strategy includes plans for China and Venezuela to build four oil tankers and three refineries in China capable of processing Venezuela’s heavy, sulfur-laden crude.

China and Venezuela have also invested in a $12 billion fund to finance joint development projects in areas including oil production, infrastructure and agriculture.

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