Medvedev calls for world currency at G-8

[Lesbian Fisting]

http://www.bloomberg.com/apps/news?pid=20601087&sid=aeFVNYQpByU4

July 10 (Bloomberg) -- Russian President Dmitry 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.”

“Here it is,” Medvedev told reporters today in L’Aquila, Italy, after a summit of the Group of Eight nations. “You can see it and touch it.”

The coin, which bears the words “unity in diversity,” was minted in Belgium and presented to the heads of G-8 delegations, Medvedev said.

The question of a supranational currency “concerns everyone now, even the mints,” Medvedev said. The test coin “means they’re getting ready. I think it’s a good sign that we understand how interdependent we are.”

Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the U.S. dollar’s future as a global reserve currency. Russia’s proposals for the G-20 meeting in London in April included the creation of a supranational currency.

[ANGELDUST]

he said this while he was drunk as shit.....stumbling around and all

[R@ndomH3ro]

cue casek and his talk of a new world order

[christo-f]

Medvedev can stick that coin up his arse and vomit gold poo poo for all the good that it will do.


The US has such depth in it's dollar that any quantity of a run can hit it and the economy will stand it and survive. Show me one other national economy that has that depth of strength. They also talk of WB SDRs as the new basket standard currency..., yeah, great. Who controls the WB...? Ask yourself why buying WB bonds didn't increase WB voting rights. Because the country that controls the World Bank also owns the standard reserve currency, they aren't about to give that up to two economies that are either about to shit themself based one demographics alone or are built on artificial money supply and employment. They also are not about to give up their control of the bedrock of the global economy. And why the fuck should they? The US has proved itself to be the most rational and powerful economy in the world and even with the latest economic hiccup it is still the most reliable investment in the world.

Medvedev is playing theatrics to his own electorate in an effort to differentiate himself from Putin and eclipse his power in Russia. The coin he showed is a collector's item. Who will honor it, who will mint it, who will control it, who will bank it...? Fucking no one because the Russian society is a fucking basket case that has one generation left in it. The latest generation are alcoholics and herione addicts plagued with HIV and Hep. Russia is resurging but you can count on it when I say they are only going down shooting...., from the hip, might I add. They have no futer, neither does this silly new coin and China has got little more to offer.

Forget this shit, it's a non-stater and if you want evidence, go look how much China is still putting in to US T-Bills while making the same calls for an SDR based global standard.

Won't happen, goodnight.

[R@ndomH3ro]

I pretty much agree...Russia is full of shit and always has been
Their economy is based on slave trade and crime connections, that drunk ass really cant talk about anything to do with money until they fix their own situation.

US is a pretty solid market, but I believe that sometimes the US really doesnt give itself credit. We are always dumping money into forgein copperations and markets instead of recycling into ourselves.

US should support more US

[R@ndomH3ro]

But I will say on thing as a pro towards "one world currency"

It will make it easy to fucking travel, no more calculating exchange rates and thinking about how much money your are losing or gaining.

Make my life of an international super tramp easy!

[lord_casek]

Medvedev can stick that coin up his arse and vomit gold poo poo for all the good that it will do.


The US has such depth in it's dollar that any quantity of a run can hit it and the economy will stand it and survive. Show me one other national economy that has that depth of strength. They also talk of WB SDRs as the new basket standard currency..., yeah, great. Who controls the WB...? Ask yourself why buying WB bonds didn't increase WB voting rights. Because the country that controls the World Bank also owns the standard reserve currency, they aren't about to give that up to two economies that are either about to shit themself based one demographics alone or are built on artificial money supply and employment. They also are not about to give up their control of the bedrock of the global economy. And why the fuck should they? The US has proved itself to be the most rational and powerful economy in the world and even with the latest economic hiccup it is still the most reliable investment in the world.

Medvedev is playing theatrics to his own electorate in an effort to differentiate himself from Putin and eclipse his power in Russia. The coin he showed is a collector's item. Who will honor it, who will mint it, who will control it, who will bank it...? Fucking no one because the Russian society is a fucking basket case that has one generation left in it. The latest generation are alcoholics and herione addicts plagued with HIV and Hep. Russia is resurging but you can count on it when I say they are only going down shooting...., from the hip, might I add. They have no futer, neither does this silly new coin and China has got little more to offer.

Forget this shit, it's a non-stater and if you want evidence, go look how much China is still putting in to US T-Bills while making the same calls for an SDR based global standard.

Won't happen, goodnight.


Not so, Christo. The dollar is weak and getting more so by the day.
Global depression is upon us.

[R@ndomH3ro]

You mean its already here...

[george jetson]

but it wont last... its always a roller coaster with ups and downs. im not feelin the international currency.

[lord_casek]

You mean its already here...


Not to the extreme that it will be. Right now, we're at 20% unemployment
in the U.S., another 5% and we'll be at great depression levels. That's when
the fireworks start.

[christo-f]

Casek, you are kidding.

The dollar could shit itself for a year and it wold still be head and shoulders above the next three economies put together.

The most simple and reliable test is to look where the major economies with large trade surpluses/forex are putting that money. By far and above it is US T-bills/dollar.

I don't need to sell this to you, it is black and white. Check for yourself.

Show me one fucking country that is going to switch from the USD to a stupid fucking coin minted in a country that is notorious for nationalising the proceeds from FDI. Serously, your fucking kidding me, right?

In this game Russia has about as much credibility as Venezuela. Who the fuck is going to to bank their national future on that?

I don't even need to sell this argument, the national banks of every developed and emerging economy does that for me with deafening effect.

I'm 2-3 months away from pulling up all those depression, gloom and doom threads to ask all you chicken littles where the depression is that you all were so sure was about to destroy the world.



And, besides all that, what the fuck does global depression have to do with the US dollar not being the standard currency anymore? A global depression is GLOBAL and the implication of that is that everything sinks in scale. The US; massive energy producer, largest industrial base, most disposable capital BY A FUCKING MILE, most easily defendable geographics, richest domestic market, smallest population to arable land/square mile ratio (of developed nations) , one of the top 5 agricultural suppliers in the world. Seriously, the world could turn upside down and the US would still be so far ahead of everyone else that it could stick a slide whistle up it's arse and still play Bohemian Rhapsody in 21 dcafinated super-sized flavors.

You don't understand how powerful you are and that is a popular view point/perspective that you can identify all through US history. You are a bunch of paranoid Chicken Littles that think every fucking acorn is the apocolypse. This makes you strong because you over-react to every threat and question to your dominance with overwhelming power that no other nation can match. And with each and every reaction you build the barriers for competition higher. Go back and read the papers from pre WW1 through to Vietnam and you will find a million other voices the same as your own spelling doom and gloom and the end of the US. Yet you have always gone from strength to strength. Your fear and paranoia matched with a willingness to use brutal force both physical and economic and an unmatched capability has led you to be the most dominant power in human history.

As an arrogant cunt I look forward to revisitng this and the depression threads in a few months to ask you if you can show me where you went wrong.


[I won a bottle of johnny walker and a bowling pin in a raffle tonight. Life is awesome.]

[christo-f]

I pretty much agree...Russia is full of shit and always has been
Their economy is based on slave trade and crime connections, that drunk ass really cant talk about anything to do with money until they fix their own situation.

US is a pretty solid market, but I believe that sometimes the US really doesnt give itself credit A-fucking-men to that . We are always dumping money into forgein copperations and markets instead of recycling into ourselves. Sure, but you already have the largest industrial output and domestic market, why do you need to invest more in that? Better to put that money overseas so you have a strategic stake in other nation's development, control the rate of technology transfer, create a dependence on US economic interest that inevitably gives the US the power to determine which currency trade is settled in and keep the US economy as the driving force of the world. US foreign investment flows is one of the kingpins for the US to control the global economy. The US economy is the most rational and efficient economic entity/structure in the world. It's like the bog from Star Trek but it actually offers benefits to those incorporated within its structure. Outside of US investment you struggle. within the US investment structure you prosper and you also strengthen and support the economic structure that keeps the US as the global leader.

You guys are so far ahead of the game that it is almost unfathomable and the most beautiful and amazing thing about it is that it was never planned (aside from your manifest destiny folk like Chenney and other hard noses) and that is what makes it so near perfection. the competition of the US brand economic model is so closely related to natural selection and evolution that it is nature epitomised in rationality. I am not American/US but my awe of what the US has done is immense.

US should support more US

The US supports the US by incorporating economies and creating interconnectedness and interdependence on US terms.

Right now China is your biggest rival not because of military might or geogrpahy but simply because they have clued on to this form of power. They are the biggest (not the richest) market in the world and they are working to create an Asian market and Asian identity. They are wanting to do the same as the US, make themselves central to the economic structure and foster dependencies. Fascinating game but I feel they will inevitably lose to the US because the US economy os sound and the Chinese economy is intrinsically false.

Ok, that's enough ranting for now.

[Y@d@d@]

I pretty much agree...Russia is full of shit and always has been
Their economy is based on slave trade and crime connections...

US is a pretty solid market


you must be watching cnbc market watch and listening to that kramer idiot orrrrrrr some shit.

US IS A SOLID MARKET???
where have you been with all these bailouts after bailout after bailouts?
and our gov handing corporations, jobs, and almost entire markets OVERSEAS??

and your saying that our economy isnt based on crime connections?

wtf do consider wall st to be? or even further than that, the federal reserve?

and im pretty sure our whole prison system on a very broad perspective and oversimpley put could be called a 'domestic slavetrade'

or am i trippin..

[lord_casek]

http://www.youtube.com/watch?v=Fl6NCPOMZ9I

[lord_casek]

Here's a pic of the coin in question
http://i28.tinypic.com/260aa3b.jpg




China criticises dollar
Dai Bingguo, who is standing in for the Chinese president Hu Jintao at the G8 meetings, raised questions over the dominant role of the dollar as the world's reserve currency.

http://www.telegraph.co.uk/news/worldnews/asia/china/5793308/China-criticises-dollar.html

[a/s/l?]

Don't sweat it.

The coins come with limited addition syringes suspended and sterilized in Kalishinkov vodka.

[christo-f]

you must be watching cnbc market watch and listening to that kramer idiot orrrrrrr some shit.

US IS A SOLID MARKET???
where have you been with all these bailouts after bailout after bailouts?
and our gov handing corporations, jobs, and almost entire markets OVERSEAS??

and your saying that our economy isnt based on crime connections?

wtf do consider wall st to be? or even further than that, the federal reserve?

and im pretty sure our whole prison system on a very broad perspective and oversimpley put could be called a 'domestic slavetrade'

or am i trippin..

Yes, you are tripping

US has a 14 trillion dollar economy. How big is the second largest economy compared to the US? What kind of financial position is that economy in right now? Does that economy back the calls being made for a new standard reserve?

How many countries are calling for a new global standard? I'll give you a quick hint, it's basically China and Russia, two of the US's strategic competitors. That will give you an idea as to what the agenda is with this idea. Second, if these guys are serious, why are they still buying massive amounts of US debt? Lastly, how much of international business is based on the Renminbi or the Ruble? two fifths of fuck all!!

Sure, the US has had bail outs and bank closures etc., you think they're Robinson Carusoe there? Most developed and third world shitholes in the world have been doing the same thing, dude. It doesn't mean you guys are fucked, by any means.

As for the whole crime connections thing, I'm not sure you actually understand how the whole world works.

[lord_casek]

Yes, you are tripping

US has a 14 trillion dollar economy. How big is the second largest economy compared to the US? What kind of financial position is that economy in right now? Does that economy back the calls being made for a new standard reserve?

How many countries are calling for a new global standard? I'll give you a quick hint, it's basically China and Russia, two of the US's strategic competitors. That will give you an idea as to what the agenda is with this idea. Second, if these guys are serious, why are they still buying massive amounts of US debt? Lastly, how much of international business is based on the Renminbi or the Ruble? two fifths of fuck all!!

Sure, the US has had bail outs and bank closures etc., you think they're Robinson Carusoe there? Most developed and third world shitholes in the world have been doing the same thing, dude. It doesn't mean you guys are fucked, by any means.

As for the whole crime connections thing, I'm not sure you actually understand how the whole world works.


Actually, China, Russia, The U.S., Mexico, Canada, France, and the UK are calling for global currency.

[christo-f]

Here's a pic of the coin in question
China criticises dollar
Dai Bingguo, who is standing in for the Chinese president Hu Jintao at the G8 meetings, raised questions over the dominant role of the dollar as the world's reserve currency.

http://www.telegraph.co.uk/news/worldnews/asia/china/5793308/China-criticises-dollar.html

Yeah, CHina and Russia are the two only real protagonists with this deal. China got a bit of a shock when the US stumbled recently because the vast majority of their investments are in the USD. Yet that still hasn't stopped them from continuing to invest in USD so that indicates teh confidence there still is in the US economy.

The US has always lectured China on its economic model (basically an artificial economy propped up by govt spending, SOEs, NPLs taken over by government asset management companies, etc.) and now the US econ has had a hiccup. So CHina is doing two things, first they are trying to give the US image/prestige a black eye by promoting the idea that the US econ is a risky investment (whilst they continue to invest in it) and that the US economy is being mismanaged. That is their counter-punch for all the lecturing that the US has dished out over the years. Added to that now the US is bailing out industry to retain employment which is exactly what the US has criticised China for.

So there is also a significant amount of politics in this, much more so than economic rationality.

No other economy has the strength that the US does so there is no suitable replacement for the USD anywhere in sight. These people can mint silly coins, support the idea of World Bank Special Drawing Rights or a basket of currencies as a global standard but right now none of these suggestions have the economic depth and strength that USD has.

Even if the USD is as fucked as you want to make out, it's still fucking light years ahead of anything else. And that has to be the most convincing argument itself of how massively big and strong the US econ is.

[christo-f]

Actually, China, Russia, The U.S., Mexico, Canada, France, and the UK are calling for global currency.

The US is calling for a global currency. Can you show me where the US admin has done that?

Would also like to see where Canada, France and the UK has said that they would support changing the standard.

[lord_casek]

The US is calling for a global currency. Can you show me where the US admin has done that?

Would also like to see where Canada, France and the UK has said that they would support changing the standard.

EU calls for global currency
Sarkozy Calls for Revamping of Capitalist System


http://www.washingtonpost.com/wp-dyn/content/article/2008/10/16/AR2008101604020.html?hpid=sec-world


Geithner "open to global currency"
Geithner Remarks on IMF Currency Roil Foreign-Exchange Market
http://www.bloomberg.com/apps/news?pid=20601068&sid=aVevdIrBPtUE&refer=home


The G20 moves the world a step closer to a global currency

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5096524/The-G20-moves-the-world-a-step-closer-to-a-global-currency.html


ECB's Nowotny Sees Global `Tri-Polar' Currency System Evolving
http://www.bloomberg.com/apps/news?pid=20601087&sid=apjqJKKQvfDc&refer=home


South American Union Will Also Have Common Currency

http://www.naturalnews.com/023480.html


Financial Crisis: Gordon Brown calls for 'new Bretton Woods'

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3189517/Financial-Crisis-Gordon-Brown-calls-for-new-Bretton-Woods.html


The End of National Currency

http://www.foreignaffairs.com/articles/62614/benn-steil/the-end-of-national-currency


TIMELINE-Gulf single currency deadline delayed beyond 2010

http://www.forbes.com/feeds/afx/2009/03/24/afx6204462.html




If you need more, I'll dig it up.

[christo-f]

From the Bloomberg - Geithner article:

Treasury Secretary Timothy Geithner sent the dollar tumbling with comments about China’s ideas for overhauling the global monetary system, only to drive it back up by affirming that it [USD] should remain the world’s reserve currency.

...

He said while he had not read Zhou’s proposal, he understood it as a plan “designed to increase the use of the IMF’s special drawing rights. And we’re actually quite open to that.”

...

15 minutes later, when Geithner then predicted no change in the U.S. currency’s role.
...

Geithner responded: “I think the dollar remains the world’s dominant reserve currency.” In an interview with CNBC broadcast after the event, the Treasury chief said that a “strong dollar” is in “America’s interest.”

In his earlier answer, Geithner said increased use of SDRs should be “rather evolutionary, building on the current architecture, rather than moving us to global monetary union.” SDRs are a unit of account at the IMF used for member countries’ reserves with the fund.

..

Geithner and Fed Chairman Ben S. Bernanke both told lawmakers on March 24 that they expected the dollar to remain the most important global currency. Obama said at a news conference the same day that “the dollar is extraordinarily strong” because investors are confident in the ability of the U.S. to lead a worldwide recovery, and also rejected calls for a new global currency.




Casek, did you even read that article? Show me the bit that accounts to the US calling for a new global currency. IT says the exact opposite, mate. Seriously I'm not sure I even need to read the other articles if you think what was written in Bloomberg accounts to the US calling for a new global currency.

Can't believe you just tried to argue that.

[lord_casek]

From the Bloomberg - Geithner article:

Treasury Secretary Timothy Geithner sent the dollar tumbling with comments about China’s ideas for overhauling the global monetary system, only to drive it back up by affirming that it [USD] should remain the world’s reserve currency.

...

He said while he had not read Zhou’s proposal, he understood it as a plan “designed to increase the use of the IMF’s special drawing rights. And we’re actually quite open to that.”

...

15 minutes later, when Geithner then predicted no change in the U.S. currency’s role.
...

Geithner responded: “I think the dollar remains the world’s dominant reserve currency.” In an interview with CNBC broadcast after the event, the Treasury chief said that a “strong dollar” is in “America’s interest.”

In his earlier answer, Geithner said increased use of SDRs should be “rather evolutionary, building on the current architecture, rather than moving us to global monetary union.” SDRs are a unit of account at the IMF used for member countries’ reserves with the fund.

..

Geithner and Fed Chairman Ben S. Bernanke both told lawmakers on March 24 that they expected the dollar to remain the most important global currency. Obama said at a news conference the same day that “the dollar is extraordinarily strong” because investors are confident in the ability of the U.S. to lead a worldwide recovery, and also rejected calls for a new global currency.




Casek, did you even read that article? Show me the bit that accounts to the US calling for a new global currency. IT says the exact opposite, mate. Seriously I'm not sure I even need to read the other articles if you think what was written in Bloomberg accounts to the US calling for a new global currency.

Can't believe you just tried to argue that.


Geithner likes to flip flop, I was hoping you'd be more up on politics and know that.
here's a youtube vid i converted and upped for you


http://www.megaupload.com/?d=D7CNK3B8

[lord_casek]

Also, the dollar is weak. Way weaker than the Fed and Obama would like us to know.


Gold, Silver Climb as Dollar Falls
http://online.wsj.com/article/SB124396801276477991.html

[lord_casek]

Here's a pretty good interview with Andy Gauss:
http://www.projectcamelot.net/andy_gauss.mp3

[christo-f]

Geithner likes to flip flop, I was hoping you'd be more up on politics and know that.


I'm sorry Casek but your argument is absolutely non-existent. You've made claims that have no basis in reality and to think that the US would call to have it's own currency/power replaced is just plain ridiculous.

[lord_casek]

I'm sorry Casek but your argument is absolutely non-existent. You've made claims that have no basis in reality and to think that the US would call to have it's own currency/power replaced is just plain ridiculous.

Ever heard of a Ponzi Scheme?



I posted a ton of articles, you picked out one. I can show you over and over how Geithner lies. But this isn't about Geithner.

[lord_casek]

David Bloom, currency chief at HSBC, said the apparent policy shift amounts to an earthquake in geo-finance.

"The mere fact that the US Treasury Secretary is even entertaining thoughts that the dollar may cease being the anchor of the global monetary system has caused consternation," he said.

http://www.telegraph.co.uk/finance/economics/5050407/US-backing-for-world-currency-stuns-markets.html




Geithner: 'Quite Open' to Idea of Global Currency
March 25, 2009 10:34 AM ET | James Pethokoukis | Permanent Link | Print

Treasury Secretary Tim Geithner says he is "quite open" to a massive reduction in the economic power and influence of the United States.

O.K, what Geithner actually said earlier today is that he is "quite open" to China's idea of a global currency system linked to the International Monetary Fund's Strategic Drawing Rights. But it might be pretty much the same thing since the whole point of the embryonic idea is to lessen the influence of the dollar. More from Geithner: "As I understand it, it's a proposal designed to increase the use of the IMF's Special Drawing Rights. I am actually quite open to that suggestion ...[though it should bee seen as an] evolutionary building on the current architecture rather than moving us to a global monetary union."

http://www.usnews.com/blogs/capital-commerce/2009/03/25/geithner-quite-open-to-idea-of-global-currency.html




Going to watch a movie and try to fall asleep. Have a good one, Christo. This is a good conversation.

[clownshoes]

world war 4 continues...

[russell jones]

Not to the extreme that it will be. Right now, we're at 20% unemployment
in the U.S., another 5% and we'll be at great depression levels. That's when
the fireworks start.


Where are you getting the 20% number from? We're not even at 20% in Michigan yet.

[lord_casek]

Where are you getting the 20% number from? We're not even at 20% in Michigan yet.


statistics ignore those who are "marginally attached"

[Lesbian Fisting]

Unemployment is at 9.7%.

[lord_casek]

Unemployment is at 9.7%.



Can you read?

statistics ignore those who are "marginally attached""People who are willing and able to work, who have either held a job or searched for employment within the last year, but are not actively seeking employment. Discouraged workers, people who are willing and able to engage in productive activities, but due to their overwhelming lack of success believe that any effort to find a job will be fruitless so they have stopped seeking employment, fall within this broader category of marginally-attached workers. People can be marginally attached to the labor force for a variety of reasons, discouraged workers, in contrast, achieve their designation specifically because they believe search efforts are not worthwhile."


http://74.125.47.132/search?q=cache:9uPbp-WNfVQJ:www.bls.gov/opub/ils/pdf/opbils74.pdf+marginally+attached+workers+unemploym ent+statistics&cd=2&hl=en&ct=clnk&gl=us

[christo-f]

And you believe this accounts for over 10% of the US population?

[christo-f]

ignore....

[christo-f]

Casek, I'm beginning to think that you posted a bunch of articles and hoped I wouldn't read them.

The Bloomberg piece was actually the exact opposite of what you said it was (the President, the Sec. Tres. and the Chairman of the Nat. Res. all on record as saying that the USD will NOT be replaced as the standard). Now this article you've posted for France/EU doesn't even have anything to do with the USD, not one little bit.

You gave the title of this article as "EU Calls For a Global Currency".

In actual fact this article was about Sarkozy calling for better regulaiton of the banking system and an end to tax havens. This issue was what bought Sarozy and Hu Jintao into a shouting match that had to be separated and mediated by Obama due to Sarkozy labalung HK and Macau as tax havens (Sarko was basically calling for these places to open up their books).

NO WHERE IN THIS WHOLE ARTICLE THAT YOU POSTED WAS THE ISSUE OF REPLACING THE USD AS THE STANDARD CURRENCY ADDRESSED.

Your argument for the EU calling for a global currency remains completely non-existent.

Please show me how that article justifies the claims that you have made for the EU or France is calling for the USD to be replaced.

[christo-f]

Oh Casek.....

You posted the UK Telegraph article as support for you claim that the UK supports removing the US as the standard currency. I assume you came to this conclusion because its title mentioned a new Bretton-Woods. Yet I also assume that you didn't actually read the article and/or understand what it was talking about.

From the article:

The Prime Minister said that we "must have a new Bretton Woods - building a new international financial architecture for the years ahead".

...

"With the same courage and foresight of [these] founders, we must now reform the international financial system around the agreed principles of transparency, integrity, responsibility, good housekeeping and co-operation across borders."

...

It is understood that the Prime Minister wishes to see the IMF reformed to become a "global central bank" closely monitoring the international economy and financial system. There may also be global rules to prevent conflicts of interest and to boost transparency in the financial system.



I'm not sure if you actually understand what happened with the global financial crisis (your linking Ponzi schemes to a conversation about global standards also reinforces my doubt) but the world was basically pissed off at the banks and their lack of proper risk/debt control. The G20 meeting provided the forum to discuss new measures to prevent the same thing happening again. That was when the first calls by China and Russia came about for the new standard.


Your claims for the UK calling for a new global currency remain totally non-existent.

Please show me where in this article or any other that the UK is calling for the USD to be replaced as the global standard.

[ILOTSMYBRAIN]

The U.S. has flip flopped on the issue.

They have repeatedly said they would at least "consider" the idea. Which has lead to fluctuations in the market, which then lead to more flip flopping about how the dollar is what we are, and it isn't changing any time soon.

I think when a country owns 30% of your debt, regardless to what you may or may not think about them, you have to pay attention to what is being said.

Our financial system is controlled and run by a group of people we (The citizens of the United States) have absolutely no control over. Now if I was investing into a company that was run like this, I would certainly be worried about my investment. Enough to pull out all of my money completely.

I hope at least this pressure gets us the ability to audit the FED and gain more power over them, not vice versa which seems to be the case.

Woe is me...

[russell jones]

statistics ignore those who are "marginally attached"

That's fine, but where does the 20% figure come from? How does it compare to figures before the recession and how does it compare to depression era figures?

[Y@d@d@]

That's fine, but where does the 20% figure come from? How does it compare to figures before the recession and how does it compare to depression era figures?

http://blogs.moneycentral.msn.com/topstocks/archive/2009/07/06/true-unemployment-rate-already-at-20.aspx

this might help.

[Y@d@d@]

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=atgpW1E28_4s



US has a 14 trillion dollar economy...

how is it not criminal that the government and the fed are stealing^^^the said amount of money (in HALf the time it takes to have a gdp) from me and what my offspring is to multiply/reproduce for the rest of time not criminal?
...the entire process of how our currency is established and generated is unconstitutional.
so what ever they do is illegal, that is how it works.

how do you call a giant black hole of perpetual debt that is exploding and multiplying, a strong and stable economy?
according to your standards from how your making it sound, money is debt?
money is debt when the fed is printing it.

[Y@d@d@]

''A man in debt is so far a slave.'' -Ralph Waldo Emerson

land of the slaves, home of the cowards.

[ILOTSMYBRAIN]

Yeah, they fuck with those unemployment statistics to make them look as best as they can.

Just as when it comes to crime, they do whatever they can to make things look safer, than it actually is.

They have made amendments to what they officially consider "unemployed". I don't remember what they changed or how they did it, but I heard at least one change, something like after a period of 5 years if someone remains unemployed they are no longer counted into that figure.

Granted people that have been unemployed for more than five years at this point, really doesn't show exactly how bad we were before this recession started, it just gives you an example as to the figures probably being a few percent higher than what is being advertised.

I know most of you know these things. I'm just saying.

Also, I will agree that we probably have at least over the course of history had one of the more sound economies, with one of the most stable forms of government. I'll also agree with Christo, as of course a country like the United States is a much safer bet as far as investments are concerned than lets say, Russia, or China. Obviously because of the history on said governments, and their economies.

I still don't believe that the US economy is as strong and dependable as is being advertised. Not until our government get's control over the FED, and the people get back control of the government from the bankers/corporate interests.

[russell jones]

http://blogs.moneycentral.msn.com/topstocks/archive/2009/07/06/true-unemployment-rate-already-at-20.aspx

this might help.

Thanks! Although, the writer did not explain how closely the method to derive the 20% figure was related to historical methods. I would like to see the same method applied to the depression to get a real idea.

Even at 20%, the current recession would not be as devastating for some compared to how the depression hurt people. We have many more safety nets in place nowadays that would make the situation of the unemployed less desperate.

[christo-f]

Just on the claim that the economy may not be as sound as "they" want to make out, that may be 100% true. However, even then it is still light years ahead of everyone else. The next two economies are Japan and China (China and Germany compete for 3rd place) and the two Asian economies are totally artificial and run on low interest government backed debt.

IF the US economy is criminal (which really doesn't mean it's not strong, it just means you don't like it)the next two are a house of cards that are at risk of being blown over when the US economy sneezes. Exactly like what we just saw with the recent issues. They are both export economies that own a massive amount of US debt. If the US sinks a bit, China and Japan crash.., disastrously. That STILL leaves the US massively stronger than anyone else.

[lord_casek]

IF the US economy is criminal (which really doesn't mean it's not strong, it just means you don't like it)


WTF?!

No, it means it is illegal. We dislike the illegality and the criminals getting away with it.

[lord_casek]

Egypt Calls for Establishing New World Order to Overcome Crises

http://english.cri.cn/6966/2009/07/12/1721s500738.htm

Obama's Biggest Radical
http://www.frontpagemag.com/readArticle.aspx?ARTID=34198


John Holdren, Obama's Science Czar, says: Forced abortions and mass sterilization needed to save the planet
http://zombietime.com/john_holdren/



http://www.infowars.com/obama-science-advisor-called-for-planetary-regime-to-enforce-totalitarian-population-control-measures/

[Y@d@d@]

IF the US economy is criminal (which really doesn't mean it's not strong, it just means you don't like it)the next two are a house of cards that are at risk of being blown over when the US economy sneezes. Exactly like what we just saw with the recent issues.



this is why interdependence of different nations on different economies is so bad!
that's why we don't want a global financial regulatory body, which would put the planet under ONE economic model so to speak... nor some sort of global currency
or even regional currency(euro/amero)!!!

one size fits all is not the fucking answerrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr rrrrrrrrrrrrrrrrrrrrrrr

[christo-f]

WTF?!

No, it means it is illegal. We dislike the illegality and the criminals getting away with it.

So what?

What ever form the economy takes or whether you like it or not has no relevance to its strength.

[lord_casek]

Ron Paul: The Fed is the world's biggest counterfeiter
http://www.megaupload.com/?d=970D02RR

[christo-f]

Egypt Calls for Establishing New World Order to Overcome Crises

http://english.cri.cn/6966/2009/07/12/1721s500738.htm

Obama's Biggest Radical
http://www.frontpagemag.com/readArticle.aspx?ARTID=34198


John Holdren, Obama's Science Czar, says: Forced abortions and mass sterilization needed to save the planet
http://zombietime.com/john_holdren/



http://www.infowars.com/obama-science-advisor-called-for-planetary-regime-to-enforce-totalitarian-population-control-measures/


No Casek.

No new articles until you answer to the criticisms I've posted to the earlier claims you made.

You either agree that your claims were false/invalid or you back them up. So far you have completely failed to do either and you need to address that rather than just continuing on as if you had never made claims you could not support.

[lord_casek]

I was busy replying to your other nonsense.



``Perhaps what we need is to go back to the first Bretton Woods, to go back to discipline,'' Trichet said after giving a speech at the Economic Club of New York yesterday. ``


“We now have global financial markets but what we do not have is anything other than national and regional regulation and supervision,” Brown lamented from Brussels.


"Sometimes it takes a crisis for people to agree that what is obvious and should have been done years ago, can no longer be postponed," Brown told an audience earlier today.
http://afp.google.com/article/ALeqM5iqbjATskwxNr2tyDViM7bbz8J_rg


http://www.reuters.com/resources/flash/include_video.swf?edition=US&videoId=92098


European Union President Nicholar Sarkozy and European Commission President J. M. Barroso are to travel to Washington to press for a sweeping overhaul of the Global financial system to include a blueprint for a Worldwide Currency System at a crunch meeting with George Bush at the weekend
http://www.youtube.com/watch?v=wFs99zBTRO0&eurl=http%3A%2F%2Fwww.infowars.com%2Feu-leaders-call-for-global-currency%2F&feature=player_embedded

http://www.megaupload.com/?d=FSIXHTPG

[christo-f]

Ok, what you have posted above says absolutely nothing about a global currency and doesn't even mention the issue.


``Perhaps what we need is to go back to the first Bretton Woods, to go back to discipline,'' Trichet said after giving a speech at the Economic Club of New York yesterday. `` [what has this to do with a new global standard? You realise that Bretton-Woods is a whole lot more than the USD/Gold standard, right?]


“We now have global financial markets but what we do not have is anything other than national and regional regulation and supervision,” Brown lamented from Brussels. [That is referring to the regulation of the global banking system when it comes to the short term money market, insurance and the selling off of debt to financial/investment houses. This has NOTHING to do with a new standard currency and nowhere does it even say that. Why are you posting this as if it has something to do with a new form of currency?]


"Sometimes it takes a crisis for people to agree that what is obvious and should have been done years ago, can no longer be postponed," Brown told an audience earlier today. [Casek, where on earth has brown EVER mention a new global currency standard??!! You are completely ignoring the fact that he is talking about financial regulation because you refuse to admit that you are wrong. You need to quote Brown saying that he supports a new global currency standard because that is what you said happened. ]


European Union President Nicholar Sarkozy and European Commission President J. M. Barroso are to travel to Washington to press for a sweeping overhaul of the Global financial system to include a blueprint for a Worldwide Currency System at a crunch meeting with George Bush at the weekend [1. Currency system is not a new standard, it is a new set of RULES. second, you need to show where Sarko said it, not some one speculation that he might.]




Once again, nowhere here have you provided evidence that the US, UK, France, EU, etc. have called for a new global standard.

You can call what I am saying as nonsense but I have repeatedly shown that your evidence is totally incorrect and you have not once shown us evidence of these countries calling for a new standard currency. Why can you not admit that?

[boner9000]

Is there actually a debate here? A quick scan of crossfire, and I see nothing involving America's health care system and public retirement funding; yet we are worried about the stability of the dollar. I'd say priorities are off, perhaps?

[christo-f]

Here you go, even I can provide better evidence for your argument than you can!!



DPJ’s Nakagawa Says Japan Should Diversify Reserves (Update1)


By Keiko Ujikane and Kyoko Shimodoi


July 13 (Bloomberg) -- Japan’s opposition party, leading in polls two months ahead of elections, said the nation should consider shifting its $1 trillion of foreign reserves away from the dollar and buying International Monetary Fund bonds.

“In the medium to long term, we need to do what we can to avoid the risk of currency losses or economic turbulence that could result if the dollar were to swing,” Masaharu Nakagawa, the shadow finance minister in the Democratic Party of Japan, said in an interview in Tokyo on July 9. “Many countries are starting to diversify their reserves.”

Japanese investors are the biggest foreign holders of Treasuries after China with $685.9 billion of the securities in April, and Finance Kaoru Yosano said last month his trust in the bonds is “unshakable.” The DPJ beat the ruling Liberal Democratic Party to become the biggest party in Tokyo’s city assembly in elections yesterday, boosting its prospects ahead of national polls that must be called by Sept. 10.

“The current reality of Japan’s foreign-currency reserves is that their heavy weighting toward dollar assets means any fall in the dollar’s value leads to valuation losses,” said Susumu Kato, chief economist in Tokyo at Calyon Securities, the investment banking unit of Credit Agricole SA. “The DPJ is opposed to a foreign-currency reserve policy that is so wholly skewed to the dollar.”

The yen traded at 92.60 per dollar at 11:10 a.m. in Tokyo from 92.54 late July 10. It has gained 4 percent this month.

‘Unshakable’ Trust

Japanese investors are the biggest foreign holders of Treasuries after China with $685.9 billion of the securities in April, according to the U.S. Treasury Department. Finance Minister Kaoru Yosano said last month that his trust in Treasuries was “unshakable.”

Nakagawa said Japan should consider purchases of new bonds issued by the IMF that will pay an interest rate pegged to the fund’s basket of currencies -- the dollar, euro, yen and pound -- and known as Special Drawing Rights. The dollar is the principal component of SDRs. The IMF said this month it would issue bonds to its 186 members for the first time.

“We should start considering that as an option,” Nakagawa said. “I am not saying we should do it right away. If everyone starts doing it all of sudden, it may sway the dollar.” He didn’t say Japan should sell any of its dollar holdings.

Challenge to Dollar

China, India, Brazil, Mexico and South Africa last week challenged the U.S. dollar as the primary denomination of world reserves. In China, whose foreign-exchange reserves probably topped $2 trillion for the first time in the three months to June 30, Premier Wen Jiabao this year said he was concerned that his nation’s dollar assets may decline as the U.S. sells record amounts of debt to fund stimulus spending.

Japan holds $1.02 trillion in foreign reserves, also the world’s largest after China’s. Losses on the holdings stood at about 21 trillion yen ($227 billion) at the end of May, according to the Finance Ministry’s estimate.

Nakagawa, 59, said Japan’s government should ask the U.S. to sell debt denominated in yen, so-called samurai bonds, as a way to diversify reserves and promote the globalization of the yen. Japan should also aim to strengthen the Chiang Mai Initiative, an Asia-wide foreign-reserve pool, and seek the creation of an Asian Monetary Fund, he said.

Nakagawa said intervening in the currency market to smooth abrupt and volatile moves is an option, though Japan shouldn’t try to push the yen up or down to achieve a prescribed level.

Currency Intervention

“If the yen were to appreciate or depreciate very steeply and the market becomes volatile, direct government intervention might be understandable,” Nakagawa said. “Intervention shouldn’t be used to strengthen or weaken it to a certain level.”

The yen has strengthened against all 16 of the world’s major currencies in the past year. A stronger yen hurts Japanese exporters by making their products less competitive. It also lowers import costs for companies and consumers.

Japan hasn’t stepped into the foreign-exchange market since 2004, when the central bank, under government instructions, spent a record 14.8 trillion yen to weaken the nation’s currency.

Nakagawa indicated that his party wouldn’t exert pressure on the Bank of Japan to keep interest rates low when policy makers try to raise borrowing costs.

“We wouldn’t put much pressure on the bank,” Nakagawa said. Japan’s central bank cut its overnight lending rate to 0.1 percent in December.

Aso may dissolve the lower house as early as tomorrow, the Yomiuri newspaper reported, without saying where it got the information. A total of 23 percent of voters said they would choose the LDP in the national election, less than the 41 percent who favor the DPJ, according to a Yomiuri poll published July 10.

The LDP has governed for all but 10 months since 1955. The DPJ already controls the upper house.






Now this is different than what China and Russia is doing, they are literally calling for a NEW reserve currency that will be based on what are typically World Bank SDRs (valued off a group/basket of currencies that are said to give a more accurate reflection of the global economy and is not balanced on the prosperity of one singe economy like it is now. Makes economic sense but it will take years/decades to not only find the right ratio of currency strengths that strike a rational reflection and give teh standard the greatest strength against dips and a run on any one or group of national currencies. Also, be aware that even in this scenario, because the US is by far and above the leading currency it will have to make up a dominant share of the SDR/basket standard anyway).

What Japan is doing here is the same as what a number of other countries are doing. They are moving away from using the USD as their majority investment. Also be aware that most countries with trade and budget surpluses have been putting the vast majority of their forex and investment in to US T-bills, bonds and straight up cash. That is too little diversification and creates a vulnerability that was illustrated quite sharply when the US economy hit a snag from last August onwards.

Now as people diversify there will be a slowly added strength elsewhere than the USD. But as is written here by the Japs (also keep in mind that this was the opposition, not the LDP. But also, the LDP lost a by-election yesterday and I think Aso is about to call an August election. The LDP term runs out in August and they have to have an election by Oct. as per their constitution.).

This process stands a chance of altering the global currency distributions and over time stands more chance of changing the USD as the standard currency than either China or Russia does. Keep in mind that this change will take decades, possibly generations and will also face strong US competition.

Russia, China and I think also Brazil have already bought a big fucking chunk of the bonds issued by the World Bank.


Just a quick comment as well. where it says "China, India, Brazil, Mexico and South Africa last week challenged the U.S. dollar as the primary denomination of world reserves.", that DOES NOT mean they are arguing for a new global currency (As a matter of fact NO ONE IS ARGUING FOR A NEW GLOBAL CURRENCY. What China and Russia really want is that there is a new global STANDARD CURRENCY. That means exchange rates, investment and so on are based of something different than the US dollar. That's different than having a minted form of money that can be used in every country, that simply won't happen for the most obvious of reasons.

What these countries here were suggesting is that countries should diversify their RESERVES so that it is not only the US dollar that countries count on. For if the US does crash, that means the whole world goes with it. IF reserves are diversified then there is an added element of survivability in the global economy.

[christo-f]

Is there actually a debate here? A quick scan of crossfire, and I see nothing involving America's health care system and public retirement funding; yet we are worried about the stability of the dollar. I'd say priorities are off, perhaps?

Well maybe for you but not everybody here is a citizen of the US, mate.

The stability of the USD has a lot more to do with global stability than the US health or retirement funds. There is a whole world out there mate and the internet is global, just like the issue that we are discussing here.

And is there a debate here? Well um YES. It's about whether there is any possibility of a new global currency standard. Maybe you should try reading a little closer.

[christo-f]

Now here is what I was talking about when I referred to the utter strength of the USD over other major currencies. China is the third largest currency in the world yet it's economy is basically a massive lie no matter from which direction you look at it. The growth that is powered by both exports (largely to the US and EU) and irrational government debt and lending is not even as high/strong as it is purported to be. That again makes the US economy stronger in comparison.

Economists Wary of China's 'Manipulated' Statistics

Chosun Ilbo

Alleged manipulation of economic data by the Chinese government has emerged as a source of controversy among economists. At the center of the controversy is whether the Chinese government manipulated economic growth figures to match the country's official eight percent target for this year.

According to China's National Bureau of Statistics, electricity usage throughout the entire country during the first quarter of this year fell four percent compared to the same period last year, but GDP grew 6.1 percent and industrial output 5.1 percent over the same period.

In response, the China unit of Samsung Economic Research Institute issued a report on June 26 saying it is difficult to understand the increased difference between electricity use and GDP and industrial output, since China's industrial structure is still dominated by energy-intensive industries. The International Energy Agency also raised doubts about China's macroeconomic figures, pointing out that not only did the country's electricity usage fall, but its petroleum consumption shrank 3.5 percent during the first quarter.

Even economists working for state-run Chinese economic think tanks are raising doubts about the government figures after it announced that industrial output rose 8.9 percent in May while electricity use fell 3.55 percent. "Actual industrial output probably grew less than five percent," said Wang Jian, secretary general of the China Society of Macroeconomics. "It appears that regional governments submitted inflated figures." Yuan Gangming, a senior researcher at the Chinese Academy of Social Sciences, also said May's economic statistics were exaggerated, while actual industrial output is estimated to have grown zero percent.

The Chinese government countered these allegations, saying that the restructuring of China's industrial landscape led to the rapid growth of less energy-dependent industries.

But foreign economists are not willing to take China's words at face value. Reuters reported early this year that it is "conventional wisdom among China watchers" that the Chinese government is prone to manipulating statistics. "Experience has taught economists to take Chinese statistics with a pinch, if not a packet, of salt," the report said.

The Korea Trade-Investment Promotion Agency issued a report last Wednesday saying it would be impossible for China to unify its methods of compiling its economic data in a short period and advised against relying too heavily on such figures. He Qinglian, a visiting scholar at Princeton University, said, "The practice of manipulating economic data has become a part of the culture of Chinese politics, with the central government using it to appease public sentiment and to embellish the achievements of Communist Party members."

[boner9000]

Well maybe for you but not everybody here is a citizen of the US, mate.

The stability of the USD has a lot more to do with global stability than the US health or retirement funds. There is a whole world out there mate and the internet is global, just like the issue that we are discussing here.

And is there a debate here? Well um YES. It's about whether there is any possibility of a new global currency standard. Maybe you should try reading a little closer.

Haha, I'm aware. I made the debate comment sarcastically as I haven't seen a good counterpoint up until the Japanese article just posted (ironically posted by christof)

I brought up health care and social security because of their relation to US debt (and thus the dollar) and the possible reforms of these programs in the near future. I realize there are many factors that influence the dollar's stability, but I think those two issues would bear more fruitful discussion.

[christo-f]

Right, right. Sorry, I got you now.

Actually I am totally against having that discussion as I know nothing about it and would have to read other people's thoughts rather than blasting everyone with my own.

As much as Australia's welfare system has its faults and may be considered semi-socialist I am proud of it and it has helped me out before when I was injured and could not work.


In summary, there will be no new global standard currency for decades, decades I say!!! :D :D :D

[christo-f]

I want to track down to what Geitner is specifically referring to when he singles out France. It could be contained in what Casek posted earlier on megaupload a I have not viewed it yet. I'd like to see the full context of what Sarko said, where he said it (was it a response to a reporter's question, was it in a press conference called by himself, was it in a newspaper interview, was said in a speech in parliament as a matter of official policy, etc.) and I'd like to see if there was any objections to this made by members of his own party/coalition. Either way, it is interesting but as you can see the US will not want this to happen and will fight against it as much as it can.


Geithner committed to strong dollar as reserve currency

NEW YORK, July 12 (AFP) Jul 12, 2009
US Treasury Secretary Timothy Geithner said Sunday he is not concerned that the US dollar is weakening as a reserve currency, despite recent criticisms from China, Russia and France.
"I actually don't worry about that," Geithner said in an interview on CNN.

"In part because if you just look at the response of the world as we go through this period of time, when people are most concerned about risk, generally they want to be investing in the most liquid, safest market," he said.

"You've seen that pattern consistently over the period of time and we want to make sure we can sustain that basic response," the Treasury secretary said, adding he would continue to work towards keeping the dollar strong.

"A strong dollar is in the interest of the United States," Geithner said, "and our commitment is the world, and of course, the American people, is to make sure we'll put in place the policies that can sustain confidence in this economy and this financial system."

Geithner's comments come as France joined a chorus of other countries critical of the dollar's dominance over other currencies, with President Nicholas Sarkozy saying Thursday that a "multipolar world must be a multicurrency world."

Sarkozy is the first European leader to join with China and Russia, who have called for a new international reserve currency similar to the Special Drawing Rights -- an artifical currency used by the International Monetary Fund.

Chinese State Counselor Dai Bingguo, speaking at this week's G8 summit, said the international community should "promote an international monetary system that is more diverse and reasonable."

But Geithner emphasized that China must play a role in the rebalancing of the global economy by pushing domestic consumption.

Previewing an economic and strategic dialogue with China scheduled to take place in two weeks time in Washington, Geithner said the United States would call for "a common framework."

So, when "we raise our savings in the United States, which is necessary, and it is already happening in a significant scale, that the world as a whole adjust to that new reality and put themselves on a path where you're going to see stronger domestic demand growth in those countries," he said.

[yumone]

love your work christo

[Y@d@d@]

my main point is, that the USD is doomed. Why do see these different countries criticizing the dollar on the frequent as of late? Because they're seriously questioning the legitimacy of our currency. They've seen how the fed magically printed the US money supply times TWO in the past nine months! Which means what? A ultra devalued dollar inevitably, or hyper inflation. How is that strength? Since the Fed's inception in 1913, the dollar today is worth 4 cents of what is was at that time! SO AT THE RATE THE DOLLARS BEEN AT FOR THE PAST HUNDRED YEARS, do you have any little bit of a hint at where its going? ...whats the end result?
green shoots in the economy? light at the end of the tunnel??
HAHAHHAHAHA
c'mon.

[Y@d@d@]

and Geithner is a fantastic liar.

[shai]

The Fed does play it pretty fast and loose when it comes to the truth. Then again, if they DID make the truth well-known (that the value of a dollar is only a fraction of what it should be worth) then there's no telling what people would do.

Remember what Big Worm said in "Friday"- "Smokey, when you fuckin' with my money you fuckin' with my emotions." Thanks to capitalism, we're pretty much stuck with the system that we have since modern society is not cut out for a barter system...then when you factor in the vast multitudes of people that are used to cushy middle management "jobs" and who have never really worked a day in their lives, it gets even more scary. If your average marketing analyst had to actually WORK to survive, what kind of odds would you give them?

I just have to laugh at the whole screwed up system. It takes fantastic amounts of effort to keep all the plates spinning, and every now and then a few (or a lot) of the plates come crashing down and it's called a "market correction" people in the US seem to shrug it off and say "Well, that's the way it goes." I attribute this to the artificially high standard of living most Americans take for granted...to me, it seems like your average American is 100% okay with assuming as much debt as they can accumulate as long as they can maintain the level of comfort they're accustomed to. Thanks to credit, they'll never have to worry about living a third world lifestyle.

Therefore, it makes sense (to me anyway) when other countries say "Wait a second, the US economy has been fucked for a while now and isn't getting any better...why exactly is the American dollar still a default international currency?"

I'm not an economist, I'm sure there's a lot of things I'm leaving out of this like purchasing power, consumer confidence, interest rate, arbitrage, and so on...but from where I'm siting (no money, no job and so far no success getting legit employment of any kind) it all seems like bullshit to me.

[Y@d@d@]

The Fed does play it pretty fast and loose when it comes to the truth. Then again, if they DID make the truth well-known (that the value of a dollar is only a fraction of what it should be worth) then there's no telling what people would do.


If there was transparency and it was a honest establishment, they wouldn't have to be fraudulent, they wouldn't have to lie, they wouldn't have to be completely secret. BUT SINCE THEY ARE, that's why the trillions are missing, that's why people are getting mad, and that's why intelligent people know the whole thing is a sham!

NOTHING IS ABOVE THE LAW, but the fed thinks they are outside of law, outside of the constitution, no oversight let alone law abidance...

here they are saying it publicly ''we're above the law, no one in government can tell us what to do''..........
http://www.youtube.com/watch?v=DjwKVaMJggw

how isnt that criminal christo?

[shai]

If there was transparency and it was a honest establishment, they wouldn't have to be fraudulent, they wouldn't have to lie, they wouldn't have to be completely secret. BUT SINCE THEY ARE, that's why the trillions are missing, that's why people are getting mad, and that's why intelligent people know the whole thing is a sham!

NOTHING IS ABOVE THE LAW, but the fed thinks they are outside of law, outside of the constitution, no oversight let alone law abidance...

here they are saying it publicly ''we're above the law, no one in government can tell us what to do''..........
http://www.youtube.com/watch?v=DjwKVaMJggw

how isnt that criminal christo?

It's simple. People value security, and the Fed has been represented as a bastion of security for so long that no one questioned the legality or morality of their actions for a long, long time.

But most people couldn't even tell you what exactly the Fed DOES, much less who's in charge of it (hint- it's not the government) or why they do what they do. All they know is that they have plastic in their pocket that can buy whatever they want...the transition to credit was probably the best thing that could have happened to the Fed. It literally gave them a license to print money which in turn stoked consumer confidence to al time highs...and when the bill came due on all the risky investments and lavish lifestyles everyone played dumb, most of all the architects who said "this CAN'T fail" when they knew damn well it couldn't last.

What's even sadder is that while the rest of the world sat up and took notice of our mistakes and are dealing with the fallout, the US appears to be spinning its wheels and waiting for a miracle.

[Y@d@d@]

What's even sadder is that while the rest of the world sat up and took notice of our mistakes and are dealing with the fallout, the US appears to be spinning its wheels and waiting for a miracle.

i thought the miracle already came... isnt his name, barack obama?

[shai]

I suppose some people might have seen it that way, but...at this point he's more or less stuck having to implement plans (for better or for worse) that were set in motion well before he ever took office. Besides, there's not very much overlap between the US presidency and the economy. Or at least there shouldn't be...I suppose it could be argued that the jam we're in can be attributed to that, but it's hard to say.

The miracle that people claimed Obama had to offer was one of unity, and I have yet to see much of that. As a nation, I think we're still a little too greedy and selfish to work together at this point.

[christo-f]

how isnt that criminal christo?

Dude, are you fucking blind?!

Show me where I have said it isn't criminal.


And you bleat on with all this bullshit about how America is doomed and the economy is fucked and all this shit dribble. But you have no idea, whatsoever about where the US is placed in the world. The next two economies after the US are so fucking far behind AND they are even more fucked than the US!!

The US could have a coronary, ebola virus AND swine flu and it would STILL be stronger than everything else!

How the fuck can't you understand that??!

Let me put it simply for you..., again.


Whether the US economy is legal or not DOESN"T MEAN SHIT.

The US economy is so far ahead of everyone else and has so much strategic depth that it could stop dead for a year and still be stronger than the next 3 put together.



Strength is comparative and economies are amoral, if you can't understand that then there is little point in discussing this matter with you.

[thehaze]

the day they try to in-act this shit, and try and put RFID chips in people is the day i steal my neighbours ak 47 and start killin mother fuckers.

viva la resistance !!


anyone else agree that a socialist revolution would be a good idea about now? i'm sure south america would join in and worst come to worst we could run away to cuba, it worked for the FLQ...

[christo-f]

Dude, could you fuck off out of here and leave this thread to people who are discussing the US economy and the global standard currency, please? There are enough threads with stupid conspiracy and revolution bullshit in here without this one turning in to the same thing.

[boner9000]

Dude, are you fucking blind?!

Show me where I have said it isn't criminal.


And you bleat on with all this bullshit about how America is doomed and the economy is fucked and all this shit dribble. But you have no idea, whatsoever about where the US is placed in the world. The next two economies after the US are so fucking far behind AND they are even more fucked than the US!!

The US could have a coronary, ebola virus AND swine flu and it would STILL be stronger than everything else!

How the fuck can't you understand that??!

Let me put it simply for you..., again.


Whether the US economy is legal or not DOESN"T MEAN SHIT.

The US economy is so far ahead of everyone else and has so much strategic depth that it could stop dead for a year and still be stronger than the next 3 put together.



Strength is comparative and economies are amoral, if you can't understand that then there is little point in discussing this matter with you.

And this is exactly what everyone is missing, economies are comparative and he who has the most chips wins. Does it really matter that the value of a 2009 dollar is a 100th what it was in 1913 if your average standard of living has increased 20 fold? I think some of you secretly fantasize about living a lifestyle of subsistence agriculture, soul crushing factory work and brutal warfare. Viva la resitance!!

[shai]

And this is exactly what everyone is missing, economies are comparative and he who has the most chips wins. Does it really matter that the value of a 2009 dollar is a 100th what it was in 1913 if your average standard of living has increased 20 fold? I think some of you secretly fantasize about living a lifestyle of subsistence agriculture, soul crushing factory work and brutal warfare. Viva la resitance!!

That's not it at all. What I'm interested in is the popular perception that the Fed is an infallible agency of the US government (when technically it's not), and the almost total lack of oversight into its intentions and actions.

When people like me, casek, and ILMB look at the evidence and draw our own conclusions from what we see, we're written off as naysayers and tinfoil hat wearers. But the bottom line is that BUSINESS IS BUSINESS, and the actions of the Fed don't seem to be in any way geared toward the greater good...they seem to be geared towards artificially manipulating prices and currency values to the disadvantage to the general populace who have to deal with the direct effects of inflation on real market prices. When you're talking about high finance and arbitrage, sure, it's all math and eventually the market will correct itself...but to date the aggregate result is that the US has been locked into an inflationary cycle since 1913 which has slowly diminished the buying power of the US dollar.

To me, what other countries want to know is pretty simple- why does a private entity (the Fed) have so much sway over the world's economy and what are the alternatives?

It's a question that has been looming for a very long time, and now that it's finally been brought to the table the US seems to be left wanting for an answer.

[christo-f]

No, that's wrong. The other countries want more regulation of financial institutions, lending practices and risk taking. It's not the Fed and the problems yo see with it that the world is concerned with.

There is diversification slowly emerging in currency reserves because people think that the way the US economy is managed is a little irresponsible and that comes back to legislation over lending practices and financial responsibility of private financial institutions. The Fed is largely irrelevant in this issue.

Hence, why Russia, China, et al never once mention the Fed.

[shai]

Wait, that seems contradictory.

There is diversification slowly emerging in currency reserves because people think that the way the US economy is managed is a little irresponsible and that comes back to legislation over lending practices and financial responsibility of private financial institutions.

This I entirely agree with. They should be concerned. But then you say...

The Fed is largely irrelevant in this issue.

How so? I realize how much debt China has bought but don't they have a vested interest in how the US maintains its monetary stock? Trust that I don't like it but that's how it is.

And I DO agree, there should be HEAPS more oversight over financial institutions, lending practices and risk assessment. Especially if other countries are indirectly funding us by speculating against our debt.

I think we agree more than either of us realize, christo-f.

[christo-f]

Yeah, I know, I'm just trying to point out that it is not the Fed's responsibility to create and enact the legislation that the other nations are looking for in the US.

They want stronger regulation on private financial institution and lending practices. This has nothing to do with the Fed's role in the economy. PEople just don't want to have a re-occurrence of the sub-prime issue that led to the current financial crisis (which is slowly working itself out).

Personally, I don't care if there is oversight or not, I'm not arguing that point either way. I'm just trying to make a few points, which I will list below:




1. China and Russia are calling for a new global standard currency for political reasons. They are using the recent issues with the US money markets (sub-prime lending that caused a global melt down) and the subsequent volatility in the dollar as their reasoning.

2. Nobody gives a shit what Russia or China thinks as their economies are totally fucked.

3. The US, UK, EU are NOT calling for a new global standard currency and no evidence has been shown to the contrary. France, I'll have to hold out on that one either way as I have not seen the full context of Sarkozy's remarks from last Thursday.

4. Other states are looking to diversify their currency reserves as they realise that just banking in the US gives no diversification, which any idiot investor can tell you is bad practice. This does NOT equate for wanting a new standard however it may, over DECADES drift the world to using more than one standard or going with WB SDR's and so on.

5. The US Fed and inflation does not play a part in this (see point 6 for further clarification) it is an issue of legislation which comes from the government and concerns regulating the behaviour of private financial institutions on lending behaviour and risk assessment.

6. THE US ECONOMY IS NOT FUCKED AND YOUR COUNTRY IS NOT DOOMED..., FFS!! IT doesn't matter whether the Fed is an illegal institution of fire spitting devils, your inflation or how much your dollar can buy doesn't matter. What matters is how strong the US economy is to the rest of the world. What matters is how much strategic depth and industrial output the US has and how willing other nations are to invest in your economy which is not only buying your debt but also how much foreign direct and indirect investment flows in to your country and businesses.






Now, a few facts about the US economy and strategic advantage:

The US economy is at 14 trillion, the next closets one is about 7 trillion and that economy is absolutely fucked and has been teetering on the brink of disaster since world war fucking 2.

The US is the number one destination for both foreign direct and foreign indirect investment.

The US is still BY A MASSIVE FUCKING GINORMOUS margin the number one destination for investment in national debt.

The US is still the deepest, strongest and largest industrial base IN THE WORLD.

The US has one of the best square mile of arable land per capita in the developed world (might be best ratio, not sure).

The US is one of the world's largest oil and gas producing nations.

The US is a net food exporter.

The US controls the world's oceans AND THAT MEANS THE US CONTROLS WORLD TRADE!!

The US controls space and is so far ahead of space tech/exploration that it is unlikely anyone will catch up for 100 years+++

The US has the most dominant army ever seen and it is unlikely that they would lose a war even if Russia, China, India, the UK, France, Germany, Australia, Canada and Iran joined forces to fight against you.





WHAT.THE.FUCK have you cry babies got to worry about?

You are so far ahead in every way that you are unbeatable for 100+ years yet all you want to do is cry doom and fucking gloom. Fair dinkum, you guys are the biggest fucking whingers I've come across (except for Shai, he's cool. So's Casek, but he's prone to silly assumptions). Every acorn that bumps you on the head is equal to the sky falling.

Truly phenomenal how little you people know about yourselves.

I think I'm done here..., unless Casek wants to post some more articles I can pick apart :p

[shai]

I mean, I have nada. A laptop, a duffel bag full of clothes, and a couple of deferred dreams that I wish I could at least hope to see somewhat come to fruition...when things were good here (1998-2005) I had a shot at the brass ring but as time has gone on it's become apparent that I'm nowhere near security, never mind success.

But that's all right. It's not necessarily a question of who's to blame, I just like to ask questions and wonder why it always has to come down to the haves and the have nots.

The funny thing is that I can deal with having nothing better than the average American. What I worry about is when the other 99.99% is going to do if the shit really hits the fan...and christo-f, in spite of your optimism, it's not as cut and dried as you would like it to be.

[christo-f]

I can only give the suggestion of that being the nature of the world, my friend. Doesn't matter if you're a man, monkey, lion, bird or beetle. There are the haves and have nots in everything. Just like there will always be competition and war to make that the reality.

[shai]

But you're talking about a country that was basically founded on the concept of manifest destiny and plenitude. Now that the population of the world has metastasized to a degree where the only option is to share, you're up against some very ingrained beliefs and tendencies.

I have spent a LOT of my time lately trying to give back to the community in whatever way I can, but I gotta tell you...there's a whole new group of people coming out of the woodwork in the US that aren't equipped physically, mentally, or spiritually to do without, and that scares the hell out of me. This isn't a third world country going through the same old same old, it's people who were part of the first world who got left behind when the shit hit the fan.

As I said, I can adapt. What about everyone else? How do they fit into the picture?

[christo-f]

The manifest destiny bit only fits with US leadership and democracy (originally from east to west coast but some like to make it a world view now..., looking at you GWB ). I wouldn't agree that the only option is to share, the global population is slowing in growth and by this time in the next 50-100 years will be shrinking to the point that we will have to adapt to smaller populations, not larger as everyone seems to think. It's going to be an issue of sharing the workload rather than sharing resources!

What are they going to do? More than likely adapt or die..., or they could eat you if you're not careful!

[lord_casek]

the day they try to in-act this shit, and try and put RFID chips in people is the day i steal my neighbours ak 47 and start killin mother fuckers.

viva la resistance !!


anyone else agree that a socialist revolution would be a good idea about now? i'm sure south america would join in and worst come to worst we could run away to cuba, it worked for the FLQ...

Ok, this is fucked up. Why are you using hush.com as an email provider?

No, we don't want a bloody revolution. That is the worst thing possible. Killing
people isn't a fucking game. When you kill you are taking away someones son, brother, father, etc.

Revolution may be unavoidable, but it is not an objective.

Socialist revolution? Are you a provocateur?


I am watching you.

[Y@d@d@]

No, that's wrong. The other countries want more regulation of financial institutions, lending practices and risk taking. It's not the Fed and the problems yo see with it that the world is concerned with.

There is diversification slowly emerging in currency reserves because people think that the way the US economy is managed is a little irresponsible and that comes back to legislation over lending practices and financial responsibility of private financial institutions. The Fed is largely irrelevant in this issue.

Hence, why Russia, China, et al never once mention the Fed.

Christo, are you aware that Timothy Geithner, Obama's appointment to the US Secretary of Treasury, was head of the New York Federal Reserve for 6 years prior? That being said, the oversight and new regulations the rest of the world is demanding that the US puts in place, this new legislation was written and undermined by Timothy Geithner! Ex-Head of the FED! So who's orders is Geithner really following?.......The people who made it possible for all the 'greedy risk taking' and 'risky lending practices' are the same people who wrote the new legislation to 'FIX THE PROBLEM!!
obama and giethner both say we need to give the fed more power so this does not happen again... they want to give the fed the same regulation powers your referring to up there^ that all these other nations are demanding..........and the fed is irrelevant?


i agree china and russia are politically motivated in everything they say/do.
the US is super influential to everything on the planet, i get that.

the only point im stressin, is that at the center of anything regarding economics and fiances in the US, is the federal reserve.

[thehaze]

Ok, this is fucked up. Why are you using hush.com as an email provider?

No, we don't want a bloody revolution. That is the worst thing possible. Killing
people isn't a fucking game. When you kill you are taking away someones son, brother, father, etc.

Revolution may be unavoidable, but it is not an objective.

Socialist revolution? Are you a provocateur?


I am watching you.


Hush.com is the best, its PGP encryption, i value my privacy, if you ask me people are insane not to use it, its like a tinfoil hat for your computer hahaha. I just don't like the idea that the RCMP, CSIS, CIA or the FBI could look through my emails, not that I'm a terrorist or some shit, I just value my rights. With hush i know that those fuck's would have to come in my house, install a key logger, and then come back later and get the info off it to read my emails, which isn't going to happen.

Yes, I guess you could say that it is in me to incite such a thing. I'm a social libertarian, I have thought this way for as long as i knew about politics, and only found out later that my ideals were on the fringe. I realize my dreams are far to radical to be practical. However i look to group's like Sinn Féin and see hope that a social revolution is possible and maybe one day in the future humanity can look back and laugh about a day when total equality and free access to the means of production was just a dream.

Now to how this relates to a world currency.
I value sovereignty and liberty above all.
A world currency, free trade, and all that shit only helps the wealthy, and takes away from a nations sovereignty, thus taking away from the rights of the citizens of that nation. If those corporations were equally owned by the workers then I probably wouldn't have a problem with it. But since it cannot directly benefit the collective population, i say fuck'em. Its like the issue of natural resources, they should be equally owned by the citizens of the country the resources are from, but instead the government is only too happy to pawn them off to their cronies and get some under the table cash for it, while the rest of us are left out in the cold.

Either way, I have the ability to live off the radar. I'm in dept to no one, and never will be. Not that I have wealth, but I still live in a real community, were people help each other, no one goes without, even if it means you have less. I was brought up this way, and I will live this way. I work hard, not for myself but for those around me, like wise they do the same. If your wondering, yes I'm from an isolated area where living off the land and sea is still a reality.

You people can talk all the shit you want, and live how you want. But the day "your" ill choices affect how I have to live my life is the day shit hits the god damn fan, and that's just how it is.

[lord_casek]

Hush.com is the best, its PGP encryption, i value my privacy, if you ask me people are insane not to use it, its like a tinfoil hat for your computer hahaha. I just don't like the idea that the RCMP, CSIS, CIA or the FBI could look through my emails, not that I'm a terrorist or some shit, I just value my rights. With hush i know that those fuck's would have to come in my house, install a key logger, and then come back later and get the info off it to read my emails, which isn't going to happen.

Yes, I guess you could say that it is in me to incite such a thing. I'm a social libertarian, I have thought this way for as long as i knew about politics, and only found out later that my ideals were on the fringe. I realize my dreams are far to radical to be practical. However i look to group's like Sinn Féin and see hope that a social revolution is possible and maybe one day in the future humanity can look back and laugh about a day when total equality and free access to the means of production was just a dream.

Now to how this relates to a world currency.
I value sovereignty and liberty above all.
A world currency, free trade, and all that shit only helps the wealthy, and takes away from a nations sovereignty, thus taking away from the rights of the citizens of that nation. If those corporations were equally owned by the workers then I probably wouldn't have a problem with it. But since it cannot directly benefit the collective population, i say fuck'em. Its like the issue of natural resources, they should be equally owned by the citizens of the country the resources are from, but instead the government is only too happy to pawn them off to their cronies and get some under the table cash for it, while the rest of us are left out in the cold.

Either way, I have the ability to live off the radar. I'm in dept to no one, and never will be. Not that I have wealth, but I still live in a real community, were people help each other, no one goes without, even if it means you have less. I was brought up this way, and I will live this way. I work hard, not for myself but for those around me, like wise they do the same. If your wondering, yes I'm from an isolated area where living off the land and sea is still a reality.

You people can talk all the shit you want, and live how you want. But the day "your" ill choices affect how I have to live my life is the day shit hits the god damn fan, and that's just how it is.


That's all good and fine, but you know that you target yourself when you use such things.
I remember using hushmail back in the day, then I got this letter right after the 9/11 attacks saying that the govt was forcing hushmail to do some things that they didn't agree with. Stopped using it after that.

PGP is also available for gmail. As I said, when you do such things, you target yourself (and hopefully waste their time).

Also, you don't just walk around talking about violent revolution. What will be will be.
Leave it at that.


Good for you living in a place where you can sustain your life and those you care about. I'm in a similar situation. Thank god for the country.

[lord_casek]

Christo, are you aware that Timothy Geithner, Obama's appointment to the US Secretary of Treasury, was head of the New York Federal Reserve for 6 years prior? That being said, the oversight and new regulations the rest of the world is demanding that the US puts in place, this new legislation was written and undermined by Timothy Geithner! Ex-Head of the FED! So who's orders is Geithner really following?.......The people who made it possible for all the 'greedy risk taking' and 'risky lending practices' are the same people who wrote the new legislation to 'FIX THE PROBLEM!!
obama and giethner both say we need to give the fed more power so this does not happen again... they want to give the fed the same regulation powers your referring to up there^ that all these other nations are demanding..........and the fed is irrelevant?


i agree china and russia are politically motivated in everything they say/do.
the US is super influential to everything on the planet, i get that.

the only point im stressin, is that at the center of anything regarding economics and fiances in the US, is the federal reserve.

Don't forget about the Goldman-Sachs connections...

[christo-f]

I disagree so strongly with the fundamentals of your argument Y@d@d@ that I'd rather not follow it any further. I'm not saying that you're a bad bloke or that I won't chat with you about other things but I just feel that we view this issue on such different levels to each other that it would be wasting both our time to continue any further. I do, however respect that you pay attention to the world around you and that you choose not to be a mindless consumer of all that is fed to us.

thehaze, you might be a nice guy but you have pretty much zero idea of anything that you discuss.


Shai, always up for a chat, mate.


Casek, mate, pretty sure I took you down on this one, just the same as I took you down on the claim that all major cities in the US have predators and aerostats over them. YOu make the claims, I shoot them down!! [insert cheeky smile]. But don't worry, I too will put myself out there for you to pounce upon (in a totally heterosexual and academic way), just waiting for teh right issue to come along.

[lord_casek]

Casek, mate, pretty sure I took you down on this one, just the same as I took you down on the claim that all major cities in the US have predators and aerostats over them. YOu make the claims, I shoot them down!! [insert cheeky smile]. But don't worry, I too will put myself out there for you to pounce upon (in a totally heterosexual and academic way), just waiting for teh right issue to come along.


No, you didn't take me down on the either. We share different beliefs on this one, you'll just have to wait and see about the spy in the sky....

Secret special hint: People mistake them for alien craft....a lot.

[Y@d@d@]

so i guess this thread is officially burnt out.
12oz's only chav has won, according to himself.

[shai]

Christo-f is definitely not a chav....and I'm pretty sure there's more than one on 12 oz, but they don't pop up in Crossfire much.

[christo-f]

No, you didn't take me down on the either. We share different beliefs on this one, .

Oh dude, you made claims that had no substance and you could provide nothing to support your claims.

I also spend a lot of my professional time paying close attention to this issue in fairly intricate detail, I'm 100% confident in what I say.

[christo-f]

so i guess this thread is officially burnt out.
12oz's only chav has won, according to himself.

Haha, I don't even know what a chav is, so I guess you can call me a chav all you like, mate!

Mate, you don't even talk sense and you know fuck all. That's why I don't want to discuss anything with you, especially if you think a discussion like this is a competition that some one wins.

[lord_casek]

Oh dude, you made claims that had no substance and you could provide nothing to support your claims.

I also spend a lot of my professional time paying close attention to this issue in fairly intricate detail, I'm 100% confident in what I say.


All good, man.

[christo-f]

Yeah, it's pretty good for me to discuss this stuff with you as well because it makes me go back and refresh myself on stuff and also alerts me to some stuff I wasn't aware of, case in point is Sarkozy's comments last week. Still not sure WTF that's all about, will make time to track it down today and I'll forward what I find to you.

[lord_casek]

Yeah, it's pretty good for me to discuss this stuff with you as well because it makes me go back and refresh myself on stuff and also alerts me to some stuff I wasn't aware of, case in point is Sarkozy's comments last week. Still not sure WTF that's all about, will make time to track it down today and I'll forward what I find to you.


Just like finding images in clouds, man. One of us can see a penguin, the other a bear.

Looking forward to seeing what you come up with.

Btw: Forgot to answer you about NAU. The SPP signed in '05 talks a bit about a North American Currency.

[christo-f]

The Chinese know this just as much as the Russians do.


No alternative to euro, dollar-Russia dep c.bank head
Wed Jul 15, 2009 4:35am EDT

MOSCOW, July 15 (Reuters) - No currency can displace the euro and dollar as a reserve currency in the foreseeable future, deputy central bank chairman Gennady Melikyan said on Wednesday.

"The euro and dollar will dominate for now," Melikyan told reporters.

Melikyan said Russian banks saw slowing growth in non-performing loans loans last month. They rose 5.9 percent to 4.8 percent of the total loan portfolio in June, excluding Russia's top lender, state owned Sberbank (SBER03.MM), he said.

[boner9000]

China and the dollar
Yuan small step
Jul 9th 2009 | HONG KONG
From The Economist print edition

The dollar’s role as the world’s main reserve currency is being challenged

Illustration by S. Kambayashi

THE Chinese used to call dollars mei jin, which means “American gold”. Buying black-market dollars was considered the safest way to protect one’s savings. Yet in June when Tim Geithner, America’s treasury secretary, told students at Peking University that China’s official holdings of Treasury bonds were safe, the audience laughed. Faith in the greenback is waning.

In the build-up to the annual summit of G8 countries, which began on July 8th in the Italian city of L’Aquila, officials in China, Russia and India all called for an end to the dollar’s dominance in the international monetary system. Dmitry Medvedev, Russia’s president, declared on July 5th that the dollar system is “flawed”; his central bank has been reducing its dollar holdings. The People’s Bank of China (PBOC), China’s central bank, repeated its call for a new global reserve currency in June and is now taking the first steps towards turning the yuan into a global currency.

Beijing is particularly influential in this debate. The dollar accounts for 65% of the world’s foreign-exchange reserves (see chart), only slightly less than a decade ago and well ahead of the euro’s 26% share. Three-quarters of all reserves are in the hands of emerging economies; China alone holds one-third of the global stash.


So China has particular cause to worry that America’s massive printing of money in response to the financial crisis will undermine the value of its dollar reserves. There is much domestic anger about the potential losses China may face as a result of its lending to rich Americans. The government would like to diversify out of dollars: its new purchases of Treasury securities have fallen sharply this year. But any attempt to dump its stock of dollars would risk triggering a plunge in the currency. Instead, officials are mulling two ways out of the “dollar trap”: persuading the world to adopt a new global currency and encouraging the international use of the yuan.

In an essay in March, Zhou Xiaochuan, the governor of the PBOC, argued that basing the international financial system on a national currency will tend to exacerbate global imbalances. The dollar’s reserve-currency status let America borrow cheaply, causing the country’s credit and housing bubbles to persist for longer than they otherwise would have. Mr Zhou proposed that the world should replace the dollar with a global reserve currency, the SDR (Special Drawing Rights). Created by the IMF in 1969, and now based on the weighted average of the dollar, euro, yen and pound, the SDR was designed as a reserve currency but never took off. SDRs today add up to less than 1% of total reserves.


Under Mr Zhou’s plan the amount of SDRs would be hugely increased and the basket expanded to include other currencies, notably the yuan. Mr Zhou also proposes an SDR-denominated fund, managed by the IMF, into which dollar reserves could be exchanged for SDRs. Countries could then reduce their dollar exposure without pushing down the dollar (although it is unclear who would bear any exchange-rate losses).

Brazil, India and Russia have backed Mr Zhou’s proposal. But the SDR is unlikely to become a reserve currency any time soon. It would take years to develop SDR money markets that are liquid enough to be a reserve asset. Although the IMF’s executive board approved the first issuance of SDR-denominated bonds on July 1st, as the fund attempts to boost its resources, the bonds can only be bought and traded by central banks, not by private investors.

China’s alternative ploy is to promote the yuan’s use in international trade and finance. Starting on July 6th selected firms in five Chinese cities are now allowed to use yuan to settle transactions with businesses in Hong Kong, Macau and ASEAN countries. Foreign banks will be able to buy or borrow yuan from mainland lenders to finance such trade. In June Russia and China agreed to expand the use of their currencies in bilateral trade; Brazil and China are discussing a similar idea.

The PBOC has also signed currency-swap agreements with Argentina, Belarus, Hong Kong, Indonesia, Malaysia and South Korea. The central bank will make yuan available to pay for imports from China if these countries are short of foreign exchange. In another recent move, Hong Kong banks are now allowed to issue yuan-denominated bonds, a step towards building an offshore yuan market.

Qu Hongbin, an economist at HSBC, predicts that by 2012 nearly $2 trillion of annual trade (over 40% of China’s total) could be settled in yuan, making it one of the top three currencies in global trade. Others reckon this is too optimistic. Although Chinese firms are keen to invoice in yuan, trading partners will be more reluctant. There is no real forward market for the yuan, making it hard to hedge risk, and it is not accepted by most other countries.

The yuan will be used more widely for trade over the next decade but the idea that the yuan can become a reserve currency in the near future is ridiculous, says Arthur Kroeber at Dragonomics, a research firm based in Beijing. Not only does China lack the economic and political track record required to underpin a reserve currency, but its currency is not fully convertible. China would need to scrap capital controls so foreigners could invest in yuan assets and then freely repatriate their capital and income, but the government is wary of moving too quickly. A reserve currency also requires a deep and liquid bond market, free from government interference. This, says Mr Kroeber, implies a big retreat from China’s state-led model of credit allocation.

Even if China immediately scrapped capital controls the yuan would be unlikely to challenge the dollar as a reserve currency for years. The dollar did not replace sterling until half a century after America’s economy had overtaken Britain’s. America’s GDP is around three times as big as China’s, and its total trade is still larger.

Both the SDR plan and measures to internationalise the yuan also seem to assume that China’s problem is simply that too many of its reserves are in dollars. But China’s real problem is that it is running a persistent current-account surplus; in order to keep the yuan closely tied to the dollar it has to keep buying more dollar assets. If China really wants to reduce its exposure to the greenback it must allow the yuan to rise. It would incur a loss on its existing reserves but stem future losses. But so long as China maintains its current exchange-rate policy, it is, ironically, helping keep the dollar dominant.

[christo-f]

And China won't allow the Yuan to float freely because it would immediately appreciate by 30% absolutely decimating much of China's export industry that is the power of the Chinese economy and that runs on thin profit margins already.

SDRs are the best bet for something like this. China and Russia have already sunk billions into WB bonds recently and I think that Brazil was working towards doing the same thing. Another reason why Russia, India, Brazil and a few other developing economies are supporting this idea is because the there is also the push for developing economies to have a greater say in WB policies and the balance of voting power in the WB will be at least partially rated by SDR ownership.

That means it's not so much an attack on US economic policy/regulations for some but more so an attempt to gain more power for themselves in the global economy.

[MIDONE]

I know this thread is about currency, but does anyone have any thoughts about global precession.

[boner9000]

If you are talking about precession in the astrological sense, you are in the wrong thread. If you meant recession, then my thoughts have drifted towards de-evolution :)

[christo-f]

Yes, I have thoughts of global recession but I've been seeing a therapist and have found a good support group. I still have my bad days, but mostly I am leading a happy life now looking forward with only thoughts of growth.

I'm getting better.

[ANGELDUST]

JESUS DIED FOR YOUR SINS

[christo-f]

Well that was a bit silly, wasn't it? According to his dad I'm still going to hell for my sins, so Jesus died for nothing.

Dumb move on his part....

[christo-f]

Not particularly related to increasing the use of Yuan to settle international trade, in order to sap the power of the Dollar, but it is a in interesting move that concerns the way China handles its forex. Possibly has a little more to do with China looking to increase investment on assets overseas whilst there are bargains out there due to the economic climate.

THis is a little more related to the conversation about standard currencies, etc. in that instead of just buying/saving USD China is also looking at diversifying investment towards actual assets rather than just basic currency. This also helps CHina to regulate market prices for certain commodities (see the recent failed Chinalco buyout of Rio Tinto for an example).

China simplifies rules on forex use to boost outbound investment
+ -
09:01, July 16, 2009

People's Daily


China's foreign exchange regulator said Wednesday it would loosen its controls on overseas investment procedures and foreign exchange management of domestic companies to boost outbound investment.

In a statement on its website, the State Administration of Foreign Exchange said a regulation, which will take effect on Aug.1, would simplify the examination and approval procedures for domestic companies with overseas investment plans.

Domestic companies would be allowed to register the source of their foreign exchange financing after their investment overseas instead of obtaining approval beforehand, according to the regulation.

The regulation would also allow domestic enterprises to finance overseas investment with domestic foreign exchange loans, purchases of foreign exchange with yuan, their own foreign currency funds and profits gained abroad.

Domestic companies would be able to transfer funds abroad before their overseas projects were established, after gaining approval from SAFE. The ceiling rate was 15 percent of the total project investment.

The SAFE would also improve supervision over overseas investment and step up supervision and management over the foreign exchange used in China's direct investment overseas.

The draft of the regulation had been posted on the SAFE website to solicit public opinion from May to June.

The regulation was aimed at offering more freedom to domestic companies on their forex use, investment and financing and to encourage them to "go out of China", said Liu Guangxi, director of the SAFE's capital account management department.

"Successful overseas investment could help domestic companies to expand their markets, providing solutions to overcapacity and weak internal demand," said Zhang Qizuo, vice president of the Sichuan-based Chengdu University.

The regulation would increase outbound investment and encourage more foreign exchange uses, so as to relieve pressure brought by China's rapid expansion of forex reserves, said Liu.

China's foreign exchange reserves hit a record 2.13 trillion U.S. dollars at the end of June, the People's Bank of China said on its website Wednesday.

[MIDONE]

I was talking about PRECESSION, I did not see any threads about the subject. I was just curious if cristo-f had any thoughts on the subject. I really dont chat much on sites like this, but I do love graffitti.

[russell jones]

Yeah, I know, I'm just trying to point out that it is not the Fed's responsibility to create and enact the legislation that the other nations are looking for in the US.

They want stronger regulation on private financial institution and lending practices. This has nothing to do with the Fed's role in the economy. PEople just don't want to have a re-occurrence of the sub-prime issue that led to the current financial crisis (which is slowly working itself out).

Personally, I don't care if there is oversight or not, I'm not arguing that point either way. I'm just trying to make a few points, which I will list below:




1. China and Russia are calling for a new global standard currency for political reasons. They are using the recent issues with the US money markets (sub-prime lending that caused a global melt down) and the subsequent volatility in the dollar as their reasoning.

2. Nobody gives a shit what Russia or China thinks as their economies are totally fucked.

3. The US, UK, EU are NOT calling for a new global standard currency and no evidence has been shown to the contrary. France, I'll have to hold out on that one either way as I have not seen the full context of Sarkozy's remarks from last Thursday.

4. Other states are looking to diversify their currency reserves as they realise that just banking in the US gives no diversification, which any idiot investor can tell you is bad practice. This does NOT equate for wanting a new standard however it may, over DECADES drift the world to using more than one standard or going with WB SDR's and so on.

5. The US Fed and inflation does not play a part in this (see point 6 for further clarification) it is an issue of legislation which comes from the government and concerns regulating the behaviour of private financial institutions on lending behaviour and risk assessment.

6. THE US ECONOMY IS NOT FUCKED AND YOUR COUNTRY IS NOT DOOMED..., FFS!! IT doesn't matter whether the Fed is an illegal institution of fire spitting devils, your inflation or how much your dollar can buy doesn't matter. What matters is how strong the US economy is to the rest of the world. What matters is how much strategic depth and industrial output the US has and how willing other nations are to invest in your economy which is not only buying your debt but also how much foreign direct and indirect investment flows in to your country and businesses.






Now, a few facts about the US economy and strategic advantage:

The US economy is at 14 trillion, the next closets one is about 7 trillion and that economy is absolutely fucked and has been teetering on the brink of disaster since world war fucking 2.

The US is the number one destination for both foreign direct and foreign indirect investment.

The US is still BY A MASSIVE FUCKING GINORMOUS margin the number one destination for investment in national debt.

The US is still the deepest, strongest and largest industrial base IN THE WORLD.

The US has one of the best square mile of arable land per capita in the developed world (might be best ratio, not sure).

The US is one of the world's largest oil and gas producing nations.

The US is a net food exporter.

The US controls the world's oceans AND THAT MEANS THE US CONTROLS WORLD TRADE!!

The US controls space and is so far ahead of space tech/exploration that it is unlikely anyone will catch up for 100 years+++

The US has the most dominant army ever seen and it is unlikely that they would lose a war even if Russia, China, India, the UK, France, Germany, Australia, Canada and Iran joined forces to fight against you.





WHAT.THE.FUCK have you cry babies got to worry about?

You are so far ahead in every way that you are unbeatable for 100+ years yet all you want to do is cry doom and fucking gloom. Fair dinkum, you guys are the biggest fucking whingers I've come across (except for Shai, he's cool. So's Casek, but he's prone to silly assumptions). Every acorn that bumps you on the head is equal to the sky falling.

Truly phenomenal how little you people know about yourselves.

I think I'm done here..., unless Casek wants to post some more articles I can pick apart :p

http://www.bloodysushi.com/macro/nsfw/america-fuck%20yeah.jpg

[christo-f]

I was talking about PRECESSION, I did not see any threads about the subject. I was just curious if cristo-f had any thoughts on the subject. I really dont chat much on sites like this, but I do love graffitti.

Sorry mate, I actually have no idea what precession is!

I'm also not an economist, I just pay attention to strategic issues, this being one of them.

[christo-f]

Chinese forex kitty aids US moves
(Agencies)
Updated: 2009-07-17 08:03

China's foreign exchange reserves are surging again, helping the Obama administration sell unprecedented amounts of debt as it seeks to drag the world's biggest economy out of a recession.


Stockpiles of currency rose by a record $178 billion in the second quarter to top $2 trillion for the first time, the People's Bank of China said on Wednesday. The amount is close to two-thirds the size of China's economy and the equivalent of Italy's gross domestic product in 2006.

The cash holdings are growing as the central bank sells its currency, the yuan, to prevent an appreciation that would make the country's exports more expensive.
"People are talking about whether the Chinese may actually one day dump the dollar and Treasuries because of the problem in the US, but they are missing the point," said Stephen Jen, head of macroeconomics and currencies in London at BlueGold Capital LLP, which manages $1.1 billion. "The reserves are so big because China needs to keep the exchange rate stable for its exports. Therefore, they have to keep buying dollar assets."
The need to temper gains in its currency led China, the biggest overseas holder of Treasuries, to more than double its holdings of US government notes and bonds in three years to $763.5 billion in April, according to US Treasury data. The amount was equivalent to 38 percent of its reserves at the time.

"China's reserves will allow the US to run a higher fiscal deficit than other nations," said Bilal Hafeez, the London-based global head of currency strategy at Deutsche Bank AG.

"As the Chinese were becoming more vocal in regard to the need to move away from the US dollar, they were in actual fact buying more dollars than ever," said Derek Halpenny, European head of global currency research at Bank of Tokyo-Mitsubishi UFJ Ltd.

The dollar's share of global reserves increased to 65 percent in the first three months of this year, the most since 2007, according to the International Monetary Fund.

China is trying to reduce its reliance on the US currency in other ways. It signed 650 billion yuan of currency swaps since December with nations from Argentina to Belarus and is encouraging trading partners to use the yuan to settle cross-border trade.
The government is considering purchasing $50 billion of the IMF's bonds after the Group of 20 leaders on April 2 gave the international lender approval to boost its war chest by $500 billion.
China can afford that and more because its reserves will increase by more than $200 billion annually in coming years, said Wang Tao, an economist with UBS AG in Beijing. Increasing its strategic oil reserve to 90 days of imports, the nation's target for 2020, would take another $50 billion, Wang said.

China this week relaxed curbs on overseas investment by local businesses, allowing more funds to flow abroad starting Aug 1.

[christo-f]

Some interesting quotes from that article:

"As the Chinese were becoming more vocal in regard to the need to move away from the US dollar, they were in actual fact buying more dollars than ever," said Derek Halpenny, European head of global currency research at Bank of Tokyo-Mitsubishi UFJ Ltd.

The cash holdings are growing as the central bank sells its currency, the yuan, to prevent an appreciation that would make the country's exports more expensive.
"People are talking about whether the Chinese may actually one day dump the dollar and Treasuries because of the problem in the US, but they are missing the point," said Stephen Jen, head of macroeconomics and currencies in London at BlueGold Capital LLP, which manages $1.1 billion. "The reserves are so big because China needs to keep the exchange rate stable for its exports. Therefore, they have to keep buying dollar assets."



Makes sense, buy the dollar, keep demand up which keeps exchange rates for the Yuan favourable for Chinese exports in a time when they are really struggling. Even if they weren't struggling, it still needs to keep them up as China is an export economy that requires around 8% growth per year, according to the Chinese Communist PArty to ensure critical levels of employment.

So, the bottom line here is that China is actually dependent on the US dollar staying strong for the time being and is trapped in to buying US debt until it can create a sustainable and/or viable domestic economy to the point that exchange rates aren't so critical.

[lord_casek]

Christo- I missed what you were saying about space (being controlled by the U.S.) we've actually got some competition now. China seems to be making large strides, so does Russia.
With our aid, of course. But you can't ignore them.

I just want us to go back to the moon. I think that would be fucking awesome.

Not trying to argue about that, just wanted to put it out there and see what you think about it.

[christo-f]

Sure, Russia has always been a viable competitor and China is starting to move up. But remember that the first man in to space was how many decades ago? CHina just put their first man in to space within the last year or so. The US has a massive lead on the Chinese and also has a space budget that eclipses the Russian budget by a mile.

A lot of the Russian budget runs on the proceeds of launching satellites for second party states )and space tourism that costs hundreds of millions), the US runs its space program off the mountains of taxable disposable income the country has, just as an example of the difference in the capacity of each program.

The US is currently planning to go back to the moon in order to develop a launch program for Mars exploration.

[R@ndomH3ro]

Russia and China space program??? hhahahaha

those assholes are worried about just getting into orbit
we are fucking already going to mars

chumps!

[christo-f]

Dude, the Chinese are still figuring booster reliability and the Russians are still figuring the economics to fund their excuse for a space program (have they even done a fucking space walk yet???).

THe US is looking at expanding to the rest of the SOLAR SYSTEM.

Light years ahead of the competition......

[christo-f]

So, about that new global currency that everyone seemed to want 5 minutes ago.....



China Returns to Back U.S. Dollar
Chosun Ilbo



After rattling the U.S. earlier this year by advocating a new key currency that could replace the mighty U.S. dollar, China has returned to rally behind the greenback. At the recent G8 summit China took a step back from pushing for a replacement currency, saying the issue was not Beijing's official stance. New data also shows China acquired an enormous amount of U.S. government notes and bonds in May. The state-run China Daily newspaper reported on Sunday that China's holdings of U.S. Treasuries totaled US$801.5 billion as of the end of May, up $38 billion from April and the first time the total has exceeded $800 billion. The monthly increase was also the largest since $65.9 billion in October of last year.

Since the global financial crisis erupted in the second half of last year, China has been gradually reducing its purchasing of U.S. Treasuries. Last April saw the first time in 11 months that its total holdings of U.S. Treasuries actually declined compared to the previous month, falling $4.4 billion.

Experts say China has renewed its interest in U.S. Treasuries because it is difficult to find a replacement for the dollar and more attractive investments are still hard to come by. Another factor is apparent signs of recovery in the U.S. economy.

China's foreign exchange reserves rose only $7.7 billion during the first quarter, but in the second quarter they leaped by $177.9 billion. The total amount now stands at $2.13 trillion. As China's economic recovery becomes more evident, foreign investors are flocking to the Asian country. But for China, nothing offers the scale and security of the U.S. Treasury. Investing in natural resources in other countries or acquiring foreign businesses are mid to long-term investments and are not effective in resolving the problem of excess dollars over the short-term.

"Although the U.S. dollar is showing signs of fatigue, it is difficult over the short-term to find a channel of investment as stable as the U.S. Treasury market," Ding Zhijie, a professor at China's University of International Business and Economics, said in an interview with state-run Xinhua News Agency. Yang Pyoung-seob, head of the Beijing office of the Korea Institute for International Economic Policy, said, "Another factor that appears to have played a role is the relatively faster rate of recovery of the U.S. economy compared to Europe and Japan." Yang added, "China's foreign exchange reserves have surged, so Beijing's purchases of U.S. Treasuries should continue."

At the same time, calls within China to replace the dollar as the key currency have abated. The reasoning seems to be that the value of China's dollar holdings may decline if Beijing joins the "anti-dollar" camp, which was formed by the European Union, Russia and India following the G20 global financial summit in April.

China's Vice Minister of Foreign Affairs He Yafei, who accompanied President Hu Jin-tao to the G8 summit, met with reporters in Italy on July 5 and said the dollar "will maintain its position as the key currency for years to come." Calls to create a new super-currency are "not the official position of the Chinese government," he added. One diplomatic source in China said, "The Chinese government, which sought to rattle the dollar's prominence, has rejoined the 'dollar bloc' that includes Japan and the U.S." The decision, the official added, stems from the view that dollar instability is against China's interests.





As I said previously these calls were made for political purposes, no one ever believed that a new currency would emerge. The US is too strong and will be for decades to come yet. And EVERYONE who makes the real decisions knows that.

[christo-f]

Nation to get $9b in SDRs
By Si Tingting (China Daily)
Updated: 2009-07-22 08:05

China is set to receive about $9 billion from the International Monetary Fund's Special Drawing Rights (SDRs) - the highest among all emerging nations - to boost its economy.

However, the nation is more concerned about whether it would get a better say in the running of the multilateral body to justify its growing economic weight, experts said.

Under the new SDR allocation, the US will receive about $42.6 billion, Japan about $15 billion, China $9 billion, Russia $6.6 billion, India $4.5 billion and Brazil $3 billion.
This is part of the $250 billion allocation of SDRs by the IMF to provide liquidity to the global economic system by supplementing its 186 member countries' foreign exchange reserves. The funds would be available at the end of August.

The SDRs are disbursed in proportion to each member's IMF quota and can be exchanged for hard currency such as the dollar, yen, euro or pound.

Although China would receive more SDRs compared with other BRIC countries, its share falls far short of those of the US and Japan.

"The allocation might be important for some poorer economies, but not China, which now has a massive $2.13-trillion foreign exchange reserve," said Guo Tianyong, director of the Research Center of the Chinese Banking Industry, Central University of Finance and Economics.

"China, which would surpass Japan in terms of economic output, will soon top Japan as the world's second biggest economy, and it deserves a bigger share of the IMF quota, equal to its economic position in the world," he said, adding that China thought highly of the IMF's growing prominence in global financial transactions

[christo-f]

And this would be the Sarkozy comments that we spoke about before. Not sure what France gets out of that. Also, don't think that this is the EU speaking, it was just Sarkozy when he was no longer EU Chair. Right now it's Sweden and before that it was Czech. Plus, when a country is chair of the EU they more work towards a national agenda than EU agenda.

China demands currency reform, France backs debate
09 Jul 2009 21:53:54 GMT
Source: Reuters

L'AQUILA, Italy, July 9 (Reuters) - China called on Thursday for reform of the reserve currency system at a meeting of world leaders in one of its most direct attacks on the dollar's global dominance.
Chinese State Councillor Dai Bingguo did not specifically name the dollar at talks between the Group of Eight rich nations and G5 emerging powers, but he was unequivocal in calling for the world to diversify the reserve currency system and aim at relatively stable exchange rates.
France also unexpectedly called for a currency discussion and moving toward a "multimonetary" system, though Britain warned any debate should be reserved for the long term to avoid destabilizing markets in the midst of a global recession.
China's ideas for changing the system had previously been mentioned in reports by its central bank, but had never been voiced in a speech by such a high-ranking political leader.
"We should have a better system for reserve currency issuance and regulation so that we can maintain relative stability of major reserve currencies' exchange rates and promote a diversified and rational international reserve currency system," Dai told the summit in Italy, according to a statement read by Foreign Ministry spokesman Ma Zhaoxu.
Dai made his statement to a meeting including British Prime Minister Gordon Brown, U.S. President Barack Obama and the leaders of Japan and the European Union, whose currencies are often held as part of countries' foreign exchange reserves.
There is no question on whether the comments represented those of of China's top leadership, the spokesman said.
"China's position on reserve currencies has had different interpretations, but I can tell you that what I have just quoted is the most authoritative standpoint of the Chinese government," he said.
Foreign exchange markets were unmoved by Dai's comments, with investors focused on upbeat signals for the U.S. economy and signs Germany's Bundesbank may buy corporate bonds. [FRX/]
DESTABILIZATION RISK
French President Nicolas Sarkozy later gave China's concerns a boost by saying he hoped major industrialized and emerging nations would discuss currency systems when the global economy had largely moved beyond the crisis.
"These are complex subjects where the positions have to evolve, but we can't remain based on a single currency," he said.
"We have to ask ourselves: Shouldn't a politically multipolar world correspond to an economically multimonetary world?" Sarkozy said, referring to the dollar.
British Prime Minister Gordon Brown, however, said any discussion of alternative global currencies was best avoided while leaders were focused on pulling the economy out of recession.
"In this present situation as we're trying to get out of a deep recession, I don't want to give the impression that there is some major change about to happen around the corner that suggests that the present arrangements are destabilized," Brown told reporters after talks on the second day of the summit.
Dai was attending the G8 plus G5 meeting in place of Chinese President Hu Jintao, who returned home to monitor developments in the country's northwestern region of Xinjiang after some 156 people were killed in the country's worst ethnic violence in decades. For details, see [ID:nSP465940]
Dai did not mention Special Drawing Rights (SDR), a unit of account used by the International Monetary Fund, which other Chinese officials have said could present a viable alternative to the dollar as a global reserve currency.
The People's Bank of China first suggested in March that the SDR -- effectively a mixture of dollars, euros, sterling and yen -- was better suited than any single country's currency to be a yardstick for global trade and a reliable store of value.
Sources told Reuters that China had pushed for debate about reserve currencies at the summit.
There was no mention of the issue in the draft declaration from the meeting of G8 leaders with the G5 group. The closest it came was to call for the promotion of a stable international financial system.
"We think it's not a discussion that would make sense for heads of state to deal with," said Marco Aurelio Garcia, Brazilian President Luiz Inacio Lula da Silva's top foreign policy advisor after bilateral Brazil-U.S. talks on Thursday.
"It's a discussion of obvious interest for economists," he said.
The question of displacing the dollar as the world's dominant reserve currency is highly sensitive for Beijing. Holding an estimated 70 percent of its $1.95 trillion in official foreign exchange reserves in the dollar, China has in the past been wary of saying anything that would undermine the value of the dollar and its investments.

[christo-f]

Central Bankers Support Dollar Reserve

http://online.wsj.com/article/SB10001424052748704124704575062702636935786.html?m od=WSJASIA_hps_LEFTTopWhatNews
--
By SUBHADIP SIRCAR

MUMBAI -- The use of the International Monetary Fund's Special Drawing Rights facility as an alternative reserve currency to replace the U.S. dollar is remote in the near term, heads of several central banks said Saturday.

"The possibility of SDR as a meaningful reserve currency are remote in any reasonable time horizon partly because of the governing structure of the IMF, partly because it doesn't solve the reserve and adjustment problem in our opinion," Mark Carney, governor of the Bank of Canada, said at a panel discussion organized by India's central bank.

His Indian counterpart Duvvuri Subbarao echoed his views, calling the plan a "tall order."

The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies, and they can be exchanged for freely usable currencies.

Discussions on using SDRs as a potential reserve currency gained momentum when People's Bank of China Governor Zhou Xiaochuan floated the idea of a global currency delinked from sovereign nations. China is the biggest holder of U.S. dollar assets and the greenback's decline has been a source of worry for the Asian nation.

The use of SDRs as reserve currency will distribute "exorbitant privilege" to those who hold them, Reserve Bank of Australia Governor Glenn Stevens said.

"We have said there may be some use of exploring a substitution account as a one-off reserve diversification mechanism but that would be part of a broader move towards a more flexible global system." Mr. Stevens said. "I would term that as a medium-term conversation."

The SDR is currently only a unit of account and the IMF can't be held accountable for it, RBI's Mr. Subbarao said.

"The dollar is a dominant currency and I don't think we will decide in a conference of G-20 or the IMF that we will have some other currency," Mr. Subbarao said. "If some other currency or a group of currencies have to replace the dollar, then that has to happen in an organic manner."

With a general SDR allocation that took effect on Aug. 28, 2009, and a special allocation on Sept. 9, 2009, the amount of SDRs increased from SDR 21.4 billion to SDR 204.1 billion, equivalent to about $324 billion, according to the IMF. Separately, the RBI's move to buy a large chunk of gold from the IMF was to diversify its reserve portfolio and not a comment on the U.S. dollar, Mr. Subbarao said.

India's central bank bought 200 metric tons of gold from the International Monetary Fund in last October.

"We bought gold because we believe that is a method for diversifying our portfolio," Mr. Subbarao said.

Still, Atiur Rahman, governor of the central bank of Bangladesh, favored a move toward a broader representative global currency in the medium term. "I think that the global system should gradually move into a couple of more currencies which are more convertible. For stability, the global reserve system needs a handful of 4-6 fully convertible currencies of fairly large economies or monetary unions."

Write to Subhadip Sircar at subhadip.sircar@dowjones.com