(Newswire.net — October 17, 2013) Portland, OR — It seems like both parties are unwilling to stand up and lead. Congress has just decided to kick the can down the road once again. Just look at the deal that was brokered yesterday- NOTHING WAS ACCOMPLISHED! After weeks of debate, all that was decided was to keep funding the government with deficit spending.
Our economy is not growing because BOTH parties are have failed to pass any meaningful reform. Our debt continues to rise because BOTH parties have perpetuated Obama’s excessive spending. And now all Americans are suffering because they are on the hook for the Obamacare train wreck that both parties have allowed to survive.
Treasury interest rates bottomed 15 months ago and doubled in the following year. Treasury auctions have been thinly attended. And the U.S. government’s primary foreign creditor has wagged its finger in America’s face, calling for an end to the global dollar standard and a “de-Americanization” of the world.
China is calling for a global currency to replace the dominant dollar, flexing its monetary muscle, pressing for a revamp of the world economy ahead of next week’s London summit on the financial crisis.
This surprising proposal by China’s central bank points to its unease over the vast holdings of U.S. government bonds and adds to Chinese pressure to overhaul a global financial system dominated by the dollar and Western governments. Both the United States and the European Union are brushing off the idea.
Zho Xiachuan, central bank governor, stated in an essay that “the world economic crisis shows the inherent vulnerabilities and systemic risks in the existing international monetary system.” He recommends setting up a currency made up of a basket of global currencies and controlled by the International Monetary Fund and said it would help “to achieve the objective of safeguarding global economic and financial stability.”
While not specifically mentioning the dollar, the essay was published in both Chinese and English, making clear it was meant for a foreign audience.
The dollar has been the world’s most widely used currency for decades with many governments holding a large portion of their reserves in dollars. Crude oil and many commodities are priced in dollars. Business deals around the world are done in dollars.
But the financial crisis has highlighted how America’s dollar problems wreak havoc on nations around the world. China finds itself in a bind. To manage its own currency steady, China has to recycle its huge trade surpluses, and the largest and most liquid option for investing them, is U.S. government debt.
Zhou suggested that the IMF should create a “reserve currency” based on shares in the body held by its 185 member nations, known as special drawing rights, or SDRs, to better insulate countries from the ills of one country or one currency.
Other items Xinhua essay were:
– Reform of the world’s financial system should include the introduction of a new internatonal reserve currency to replace the U.S. dollar
– The international community could thus permanently stay away from the spillover of intensifying domestic political turmoil in the U.S.
– Fiscal impasse in the U.S. is a good time for “befuddled world” to start considering building a “de-Americanized world”
– Impasse has left many nations’ dollar assets in jeopardy and the international community agonized
– Other cornerstones should be laid to underpin a de-Americanized world, including respect for sovereignty, recognizing authority of UN in handling global hotspot issues and giving developing and emerging market economies more say in major international financial institutions
– Purpose of such changes is not to “completely toss the United States aside,” rather to encourage Washington to play a much more constructive role in addressing global affairs
Does this really sound like a good time to commit the United States to aa higher debt ceiling and to make plans to borrow a few trillion more dollars?
If a country is unwilling to employ fiscal discipline on themselves, they will have fiscal discipline imposed on them. They will find themselves unable to borrow just when they are most dependent on borrowing; their currency will be rejected in their hour of greatest need.
This derangement of the debt ceiling debate was characterized by President Obama’s statement that raising the debt ceiling “does not increase our debt.” Obviously the gods have spread madness among the governing classes.
That is how they prepare those who face economic destruction.
The rest of us should just buy gold.
Sources:
http://abcnews.go.com/Business/story?id=7168919
http://www.globalresearch.ca/china-agency-calls-for-new-reserve-currency-and-new-world-order/5354190