Nations have reached their limit in subsidizing the United States’ military adventures. During meetings in June 2009 in Yekaterinburg, Russia, world leaders such as China’s President Hu Jintao, Russia’s President Dmitry Medvedev , and other top officials of the six-nation Shanghai Cooperation Organisation took the first formal step to replace the dollar as the world’s reserve currency. The United States was denied admission to the meetings. If the world leaders succeed, the dollar will dramatically plummet in value; the cost of imports, including oil, will skyrocket; and interest rates will climb.
Foreigners see the International Monetary Fund (IMF), the World Bank Group, and the World Trade Organization (WTO) as Washington surrogates in a financial system backed by US military bases and aircraft carriers encircling the globe. But this military domination is a vestige of an American empire no longer able to rule by economic strength. US military power is muscle-bound, based more on atomic weaponry and long-distance air strikes than on ground operations, which have become too politically unpopular to mount on any large scale.
As Chris Hedges wrote in June 2009, “The architects of this new global exchange realize that if they break the dollar they also break America’s military domination. US military spending cannot be sustained without this cycle of heavy borrowing. The official US defense budget for fiscal year 2008 was $623 billion. The next closest national military budget was China’s, at $65 billion, according to the Central Intelligence Agency.”
To fund the permanent war economy, the US has been flooding the world with dollars. The foreign recipients turn the dollars over to their central banks for local currency. The central banks then have a problem. If a central bank does not spend the money in the United States, then the exchange rate against the dollar increases, penalizing exporters. This has allowed the US to print money without restraint, to buy imports and foreign companies, to fund military expansion, and to ensure that foreign nations like China continue to buy American treasury bonds.
In July 2009, President Medvedev illustrated his call for a Supranational currency to replace the dollar by pulling from his pocket a sample coin of a “united future world currency.” The coin, which bears the words “Unity in Diversity,” was minted in Belgium and presented to the heads of G8 delegations.
In September 2009, the United Nations Conference on Trade and Development proposed creating a new artificial currency that would replace the dollar as reserve currency. UN wants new global currency to replace dollar and redesign the Bretton Woods system of international exchange. Formation of this currency would be the largest monetary overhaul since World War II. China is involved in deals with Brazil and Malaysia to denominate their trade in China’s yuan, while Russia promises to begin trading in the ruble and local currencies.
Additionally, nine Latin American countries have agreed on the creation of a regional currency, the SUCRE, aimed at scaling back the use of the US dollar. The countries, members of the Bolivarian Alliance for the Americas (ALBA) , a leftist bloc conceived by then Venezuela’s President Hugo Chávez, met in Bolivia where they vowed to press ahead with a new currency for intraregional trade. The SUCRE would be rolled out beginning in 2010 in a nonpaper form. ALBA’s member states are Venezuela, Bolivia, Cuba, Ecuador, Nicaragua, Dominica, Saint Vincent and the Grenadines, and Antigua and Barbuda.
The cycle supporting a permanent US war economy appears to be almost over. Once the dollar cannot flood central banks and no one buys US treasury bonds, the American global military empire collapses. The impact on daily living for the US population could be severe.
Public Private Partnerships
In addition to increased costs, states and cities will see their pension funds drained. The government will be forced to sell off infrastructure, including roads and transport, to private corporations. People will be increasingly charged for privatized utilities that were once regulated and subsidized. Commercial and private real estate will be worth less than half its current value. The negative equity that already plagues 25 percent of American homes will expand to include nearly all property owners. It will be difficult to borrow and impossible to sell real estate unless we accept massive losses. There will be block after block of empty stores and boarded-up houses. Foreclosures will be epidemic. There will be long lines at soup kitchens and many, many homeless.
World Bank Ex-Chief Economist Calls For Dollar To Be Replaced By ‘Super Currency’
The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system. “The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. “The solution to this is to replace the national currency with a global currency.” Lin, now a professor at Peking University and a leading adviser to the Chinese government, said expanding the basket of major reserve currencies — the dollar, the euro, the Japanese yen and pound sterling — will not address the consequences of a financial crisis. Internationalizing the Chinese currency is not the answer, either, he said. Lin urged the international community, especially the US and European Union, to play a leading role in currency and infrastructure initiatives. To boost the global economy, he proposed the launch of a “Global Infrastructure Initiative” to remove development bottlenecks in poor and developing countries, a measure he said would also offer opportunities for advanced economies. “China can only play a supporting role in realizing the plans,” Lin said.
A super currency could also be tied to a single currency, but the interconnectedness of world financial markets and concerns about the volatility that can occur as a result of the system being tied to one currency have made this idea less popular. Eswar S. Prasad, a trade-policy professor at Cornell University who also is a senior fellow at the Brookings Institution, said he disagrees that a super currency would protect the global financial system against breakdowns such as the 2008 downturn which plunged the world economy into its most dangerous crisis since the Great Depression of the 1930s. More
Truthdig, June 15, 2009, http://www.truthdig.com/report/item/20090614_the_american_empire_is_bankrupt/.
Broadly, PPP refers to arrangements, typically medium to long term, between the public and private sectors whereby some of the services that fall under the responsibilities of the public sector are provided by the private sector, with clear agreement on shared objectives for delivery. PPPs typically service of the privatization of utilities where there is a limited ongoing role for the public sector.
Learn more about the range of agreements typically classed as PPP projects in PPP Arrangements and Types of Public Private Partnership Agreements.
An increasing number of countries are enshrining a definition of PPPs in their laws, each tailoring the definition to their institutional and legal particularities.
The UFWC project was conceived back in 1996 by Sandro Sassoli, on the advice of Arthur Schlessinger Jr, former adviser to American President John F. Kennedy.
There are plans for the NWO currency to undergo a public test run in 2015.
“De-Dollarization:Dismantling America’s Financial-Military Empire: The Yekaterinburg Turning Point,”
Michael Hudson, Global Research, June 13, 2009, http://www.globalresearch.ca/PrintArticle.php?articleId=13969.
Fred Weir, Christian Science Monitor, http://www.csmonitor.com/2009/0616/p06s12-woeu.html.
Lyubov Pronina, Bloomberg, http://www.bloomberg.com/apps/news?pid=20601087 &sid=aeFVNYQpByU4.
Edmund Conway, Telegraph (UK), http://www.telegraph.co.uk/finance/currency/6152204/UN-wants-new-global-currency-to-replace-dollar.html.
Jose Arturo Cardenas, “Latin American Leftists Tackle Dollar with New Currency,” Agence France-Presse, http://www.google.com/hostednews/afp/article/ ALeqM5jisHEg79Cz8uRtYfZR6WK4JmWsIg.