-- Posted Wednesday, 1 April 2009 | | Source: GoldSeek.com
By R. D. Bradshaw
The Goldsmiths, Part LV, addressed the Chinese ideas on using the Special Drawing Rights as a new global reserve currency to take the place of the dollar. If you remember this thing, as it broke, President Obama came out with a strong no that he didn’t like the idea. The US Secretary of the Treasury echoed his boss. Then, almost immediately thereafter, Geithner did a complete, 180-degree, about face, and contradicted his boss by saying that the plan might have merit (obviously, Geithner received higher level instructions from someone else besides Obama).
That Goldsmiths article gave a brief backdrop on the Special Drawing Rights (SDR) and outlined that the fall out of such an effort would perhaps cause a sharp drop down on gold. It’s hard to say how far down or how fast down gold could go but we must leave prospects of $500 on the table. As a matter of fact, I earlier have read a prediction by an analyst of $500 gold. This projection was made some time ago and did not factor in the recent Chinese proposal.
But this whole issue is serious enough that gold proponents should look at the theme very carefully and watch events from the so-called Third World and BRIC (Brazil, Russia, India and China) in particular. The fact that China has made this proposal is no guarantee that the other members of BRIC would support it.
In any case, the Chinese plan has received a huge endorsement on March 26, 2009 from a UN panel of economists. Breitbart.Com described this development as follows:
“A UN panel of expert economists pressed Thursday for a new global currency reserve scheme to replace the volatile, dollar-based system and for coordinated steps by rich countries to stimulate their economies. ‘A new Global Reserve System -- what may be viewed as a greatly expanded SDR (Special Drawing Rights), with regular or cyclically adjusted emissions calibrated to the size of reserve accumulations, could contribute to global stability, economic strength and global equity,’ the panel said.
“…Among other recommendations, the Stiglitz panel proposed western aid to help developing nations out of the crisis, better market regulation, a reform of central bank practices and of international financial institutions, as well as the creation of a new structure such as a United Nations economic council. It specifically called for immediate, additional funding for developing countries ‘just to offset the imbalances and inequities created by the massive stimulus and bail-out measures introduced by advanced industrialized countries.’ It said the funds could come through the issuance of SDRs approved by the IMF board in 1997. SDRs are an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries and support the Bretton Woods fixed exchange rate system. They are allocated to member countries in proportion to their IMF quotas.”
More on the SDR Backdrop
As noted in Goldsmiths LV, the SDRs came into being in 1969 as a scheme to use in international financial settlements. The idea was that they would be a type of paper money used to replace gold and silver. In this sense, they would have completed the demonization of gold in the global economy and among national assets. Instead of nations holding gold, silver and hard currencies in their national reserves, the goal was for the world’s nations to hold and use SDRs.
The original plan was that the International Monetary Fund would oversee the SDR program and give these pieces of paper/bookkeeping entries away as the world economy grew. In the beginning, the IMF distributed some of these SDRs to certain nations on a give away basis.
While I don’t have details of the exact formula used to give these pieces of paper/entries to the nations (although, as noted above, it was supposedly based on their IMF quotas), I remember that the US, Britain, Japan and the European states got most of them. This distribution meant that nations in Africa, Latin America and Asia were largely left out of the loop or got few of them.
There is no doubt about it at all, this SDR scheme was invented by the Rothschild cabal for them to convert the whole world over to a paper money system which could be manipulated, controlled and increased worldwide as fiat currency in the hands of the powerful international banks through their control of the IMF and the various central banks. These SDRs would be the banker’s dream money on a global scale. They could be inflated to no end with out recourse or opposition from any nation.
In any case, as the 1970s came on us, and as some of the so-called Third World states began playing more of a role in international trade, the SDR concept largely faded out; though certain nations continued to use them and use them for their reserves. My own position has been that other than the few nations that received the SDRs, most of the world’s nations were unhappy over being generally left out of the loop on the big give aways.
My guess is that if the Third World nations would have been given more of this free money they would have come on board and supported the scheme wholeheartedly. For sure, the nations who were left largely out of the free give away scheme in 1969 never really got on board and the SDR thing never was implemented as the plutocratic masters conceived and wanted in the first place.
Now we have China trying to resurrect this scheme and advocating the use of the SDRs in international settlements and presumably in constituting the national reserves of various nations. As I outlined in the Goldsmiths, Part LV, I find it incredible that China could be seduced and persuaded to get involved in this SDR thing which was originally planned and conceived as a method for the US and European plutocratic masters to further steal and exploit the rest of the world. It looks like the exploitation of China by the Western plutocrats in former years would have made them flee from any resurrection of the SDR plan.
I frankly think that there was a smoke filled back room meeting between key Chinese and representatives of the House of Rothschild and other fat cat international bankers. I don’t know what the plutocrats promised the Chinese in order to get them to float this scheme but we can bank on it that they will get much. After all, the Chinese are clever and crafty in their own right and not as subject to plutocratic rip offs as is true with Americans and other Westerners. It would not surprise me at all that the Rothschild Cabal offered them a huge share of the SDRs and even trade incentives from the US, Britain and Europe.
Since the Chinese economy is on a downward move, they could have been induced by the plutocratic masters easily enough. But we must remember that China has been buying up all of its own gold production (I mentioned this in the news/goldsmiths weeks ago). I’m sure that the Chinese are smart enough to hang on to their own gold (and the same thing can be said for a lot of other nations in the world presently).
Not only have the Chinese bargained with the Cabal for their own benefit, but there is a clue in the above statement from Breitbart.com that the Chinese have even done some maneuvering for the benefit of Third World nations in Africa, Asia and Latin America in calls for immediate, additional funding for developing countries just to offset the imbalances and inequities created by the massive stimulus and bail-out measures introduced by advanced industrialized countries. This additional funding to the Third World could come in huge grants of SDRs or in subsidies from the so-called developed world.
Many of us are aware of the bankruptcy of the Western Christian states. China has been stepping forward with money to take the place of the West in portions of Africa, Latin America and Asia. I’m sure that if they float a scheme for the Western plutocrats to give huge sums of these SDRs to the Third World, China will come out smelling like a rose. China will get far more from the Third World than they could ever have received by giving them their own money.
The Russian Response
Reuters followed up this past weekend (Mar 28-29) with a report from Moscow that “Russia supports expanding the IMF's Special Drawing Rights (SDR) to include the rouble, the yuan and gold,… a Kremlin aide said on Saturday… ‘It would be logical for the set of currencies (that make up the SDR) to be expanded, and it could include other currencies, including the rouble, the yuan and perhaps others,’ state RIA news agency reported the Kremlin's senior economic aide Arkady Dvorkovich.”
Reuters quoted Dvorkovich as saying that he sees no chance of the G20 accepting a new reserve currency next month. But his comments were such to suggest that the issue will be in the spotlight at the meeting. While China has brought the SDR thing up, this Reuters story said that G20 leaders have made clear for now that the dollar's status as the dominant reserve unit remains, but the idea of creating a new reserve currency system based on SDRs has not entirely been knocked down.
The Bottom Line
My take is that the plutocrats made a backroom deal with the Chinese for this move. I would guess that more and more nations will come out and endorse it in the coming days or offer their own version as has happened with the Russians. After all, if the West will give them enough free money, they’d be happy to come on board. And in the give away, the plutocrats will be out nothing; but will gain control of a new paper money to use in their exploitation of the world in the future.
But just like this scheme didn’t make it back in the 1970s, it’s very plausible that it will fall through the crack in this present motion. At least, my gut feeling is that it will not succeed presently. Very possibly, in a future time frame, it will make it (perhaps after WWIII). But I doubt it now in early 2009. Just like the US refused to go along with the League of Nations in 1919, it might be that she will now renege in some way. For example, the Hill’s Blog Briefing Room had this report:
“Rep. Michele Bachmann (R-MN) has introduced legislation that would ‘bar the dollar from being replaced by any foreign currency.’ A statement from Bachmann's website: ‘Yesterday, during a Financial Services Committee hearing, I asked Secretary Geithner if he would denounce efforts to move towards a global currency and he answered unequivocally that he would,’ said Bachmann. ‘And President Obama gave the nation the same assurances. But just a day later, Secretary Geithner has left the option on the table. I want to know which it is. The American people deserve to know.’
“On Monday, Geithner and Bernanke both rejected the idea of a global currency in Congressional testimony. But in remarks to the Council on Foreign Relations yesterday, Geithner indicated he was open to the idea.” Of course, Geithner would say one thing at the dog and pony show on the Hill and another to America’s secret government.
Yet, for gold and silver advocates, there is much room for concern over prices in the coming days. If the plutocrats can build up some momentum among various so-called scholars and leaders, and if the Third World gets on board, there could be much publicity from the controlled media about replacing gold and silver. As most of us know, media stories can help the plutocrats make or break markets.
In terms of the future for gold and silver, I want to watch India and other so-called Third World nations and see how they react in coming days. The Russian position is also important. If this thing gets some mobility, it could cause problems in the gold and silver markets. Certainly, for the time being, it appears that nothing will be done on the proposal at the April 2d G20 meeting. If anything happens, it will be done later and not sooner.
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-- Posted Wednesday, 1 April 2009 | Digg This Article
| Source: GoldSeek.com
