SDR’s and the New Bretton Woods – Part Six
Consolidation or Collapse, and Conspiracy Theories
By JC Collins
“In recent decades, emerging and developing economies have become bigger players in the global economy. However, their representation at the IMF has not kept pace with these changes. The G20 will continue to pursue reforms to the IMF during 2014 to ensure that country representation at the IMF better reflects the economic weight of its members. These changes will build greater confidence in the IMF’s ability to respond to global economic instability.”
- Statement on Reforming Global Institutions on the G20 Website
There is a unique game of chess taking place on the global economic scene. And like all good games of chess against worthwhile opponents it takes patience and calculation to strategize every move well in advance. This particular game began in 2010 when the G20 countries all agreed to enact the International Monetary Fund’s Governance Reforms (or Code of Reforms) to change the quota amounts for member countries and restructure the Executive Board to more accurately reflect the changing dynamics of the world economy.
With the full implementation of these reforms we will see all the currencies of the world that are now pegged to the value of the U.S. dollar shift to a more balanced system of weight values and be pegged to the value of the SDR (Special Drawing Right) as issued by the International Monetary Fund.
The SDR was originally meant as a form of credit but since the collapse of 2008 has been slowly transitioning into a form of money, or currency. Some of the reasons for the expanded use of the SDR can be found in sets of problems and remedies. Which are:
Problems in the international monetary system:
- Persistent
Global Imbalances
- Large and
Volatile Capital Flows
- Unstable
Exchange Rate Fluctuations Not Based on Fundamentals
- Insufficient
Supply of Reliable Global Assets
- Global
Policy Collaboration and Stronger System Surveillance
- Enhanced
Systemic Financial Safety Net
- Financial
Deepening in Emerging Markets
- Development
of New Reserve Assets
But first let us address the issue of corruption and rampant conspiracy theories which are overshadowing the real process and strategies which are taking place on the global scene. Next week the 2014 G20 Summit is taking place in Australia. Two of the many priorities for the G20 this year are anticorruption and reforming global institutions.
The reforming of global institutions is a clear reference to the I.M.F. Code of Reforms which have been held up in the American Congress since 2010. And we are seeing anticorruption tactics and procedures playing out every week as more and more government officials and top bank directors are being arrested or executed for fraud and crimes against the people.
The problems with the international monetary system as listed above create opportunities for corruption and for rent seeking elite groups to transfer wealth from the larger disorganized groups with no addition of new wealth to the system. This has caused severe imbalances in the system and can no longer be allowed.
In “What Are Conspiracy Theories” we defined this rent seeking elite and described how one of the tools of the larger disorganized subordinate group (the middle and lower classes) to combat the smaller elite was referred to as “weapons of the weak”.
One of these weapons is gossip. It is my proposition that conspiracy theories are in fact the unofficial and disorganized structure of this weapon of the weak. When we are left with no official source of valid information in regards to what is happening in the financial world, we are prone to analyse and function on the lowest common denominator of information sources, which are conspiracy theories.
Some of the black and white or good guy and bad guy definitions of these conspiracy theories are laughable and do nothing but create confusion and misdirection away from a real understanding of the economic situation which the world faces in our modern era.
From mystical beings to secret informants, the ridicules angles and propositions run the gambit of the most profane amongst us. Nowhere is the truth more hidden than in the midst of the absurd stories and so-called enlightenment of these secret sources and “top men”. It is a system of maggots feeding of the hopes and dreams, not to mention confusion, of the large mass of disorganized subordinates.
True enlightenment comes from the realization that helping others is helping ourselves. When you feed off others you are in fact feeding on your own life. Whether intentional or not, this bottom feeding on each other only helps and encourages the small rent seeking elite to continue in its wealth transition from the masses to itself.
I will pay no further attention to the absurdities of the profane and absurd. Good and evil exist in the minds and fairy tales of children. And there they shall remain.
With that being said there is an organized structure or process attempting to bring rule of law and a balanced system to the international monetary system. This system of change is based on the fundamentals of self-limiting rent seeking elites from large transfers of wealth which only serve to deepen economic recession. We are seeing this system of self-limiting being successfully implemented in countries such as Vietnam, China, Russia, and India, with more to come. It is not a perfect process but it is a process nonetheless.
This is not China against America. Or some shadowy group against another shadowy group. All the information about this new system is already out in the open and available for all who take an interest in learning about it.
Zhou Xiaochuan of the People’s Bank of China is one of the most vocal members of the international community calling for the implementation of this new SDR system. And a big part of the structure of this new system is the Basel 3 regulations as put forth by the Bank for International Settlements. So it’s no surprise to learn that Zhou Xiaochuan is in fact one of the board members of the Bank for International Settlements. This should put to rest any conspiracy theories about China overthrowing the current banking system.
When we hear talk of the Global Currency Reset and the Great Consolidation, what we are reading or hearing is in fact a simplified version of the modifications being slowly implemented in the international monetary system. Though they will in fact benefit greatly from the consolidation and composition process by way of increased physical assets.
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