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Waking Up To A World Currency - tna - Sept 27 2010

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  4. 4. 10 vol. 26, no. 19 September 27, 2010 Cover Story Design by Joseph W. Kelly/©iStockphoto Global Economy 10 Waking up to a World currency by Alex Newman — A world currency is not only being debated, but mechanisms are in place to ensure its ascension. 17 The Emerging Global Fed by Alex Newman — A world fiat currency would create problems that would make our present ones seem tame. 17 21 FeatureS HEalTHcarE 21 The FDa: neither Safe nor Effective by Michael Tennant — The dictates of the FDA are so ingrained in society that we seldom question whether they save lives. AP Images AP Images norTH amErica 27 Texas Sidestep by Kelly Holt — The Trans Texas Corridor, though slowed, is continuing. 27 book rEviEW 31 a Global-warming Primer by Rebecca Terrell — Climategate covers the science, politics, and goals behind global-warming claims. HiSTory — PaST anD PErSPEcTivE 34 baseball Hero by Jack Kenny — Ted Williams brought his keen eyesight, quick AP Images reflexes, and combative personality to two wars. THE laST WorD 44 comic books From the Federal reserve 31 34 by John F. McManus DepartmentS 5 letters to the Editor 33 The Goodness of america 7 inside Track 41 Exercising the right AP Images 9 QuickQuotes 42 correction, Please! covEr Design by Joseph W. Kelly/©iStockphoto
  5. 5. LETTERS TO THE EDITOR Publisher John F. McManus misnomer ralization Service regarding any person Editor QuickQuotes (May 10) reported Harry Reid who is arrested if he or she is suspected Gary Benoit making promises “to a rally of 6,000, most of being present in the United States in Senior Editor of whom were immigrants.” That’s way off. violation of federal immigration laws. William F. Jasper Maybe there were  a  dozen curious immi- (b) With respect to any such person grants there (tops) but the rest of the crowd who is arrested, and suspected of being Senior Editor/Web were not immigrants: they were invaders. present in the United States in viola- Dennis J. Behreandt “Immigrant” sounds better, and lets the in- tion of federal immigration laws, every Associate Editor vaders steal part of the good name earned law enforcement agency shall do the Kurt Williamsen by legal immigrants who didn’t yell in the following: streets for yet more free goodies. They were (1) Attempt to verify the legal status Contributors too busy learning English, trying to fit into of such person as a citizen of the United Steven J. DuBord the community, and rebuilding their lives, States, an alien lawfully admitted as a Selwyn Duke Thomas R. Eddlem sometimes from scratch. Whatever came permanent resident, an alien lawfully Gregory A. Hession, J.D. their way, they earned. They were generally admitted for a temporary period of Ed Hiserodt no problem to anybody, and they were grate- time or as an alien who is present in William P. Hoar ful to God for being here. the United States in violation of immi- R. Cort Kirkwood Dr. K. A. SKAlA gration laws. The verification process Patrick Krey, J.D. Denver, Colorado may include, but shall not be limited to, Warren Mass questioning the person regarding his or Alex Newman her date and place of birth, and entry Llewellyn H. Rockwell, Jr. Some Threats Get a into the United States, and demanding Ann Shibler response documentation to indicate his or her Liana Stanley legal status. Joe Wolverton II, J.D. In the July 19 issue, Patrick Krey recounted (2) Notify the person of his or her ap- Art Director in Exercising the Right how Richard Daley, parent status as an alien who is present Joseph W. Kelly Mayor of Chicago, threatened to shove a in the United States in violation of fed- bayonetted rifle “up your butt” when report- eral immigration laws and inform him Research er Mike Dumke raised a question at a press or her that, apart from any criminal jus- Bonnie M. Gillis conference about the city’s feckless ban on tice proceedings, he or she must either Marketing handguns. The incident has a sequel. obtain legal status or leave the United Larry Greenley It seems that after viewing Daley’s puerile States. tirade on the “Drudge Report,” Christopher (3) Notify the Attorney General of Public Relations Traynor Fox of San Jose, California, phoned California and the United States Immi- Bill Hahn the Chicago Mayor’s office to inquire how gration and Naturalization Service of Advertising/Circulation he would enjoy suffering the fate he had pre- the apparent illegal status and provide Julie DuFrane scribed for Dumke. Fox was promptly arrest- any additional information that may be ed by the San Jose police and charged with requested by any other public entity. “making threats against a public official.” Any legislative, administrative, or Evidently, there are no laws on the books other action by a city, county, or other that prevent politicians from threatening re- legally authorized local governmental porters who ask embarrassing questions. entity with jurisdictional boundaries, or Printed in the U.S.A. • ISSN 0885-6540 Geoff SKelton by a law enforcement agency, to prevent P.O. Box 8040 • Appleton, WI 54912 920-749-3784 • 920-749-3785 (fax) Westchester, Illinois or limit the cooperation required by www.thenewamerican.com subdivision (a) is expressly prohibited. editorial@thenewamerican.com Rates are $39 per year (Hawaii and Canada, Why not Sue Two? It’s probably only a problem for the Obama add $9; foreign, add $27) or $22 for six months (Hawaii and Canada, add $4.50; foreign, add It is interesting that the Obama adminis- administration when a state really means to $13.50). Copyright ©2009 by American Opin- tration is suing the State of Arizona for its enforce its laws. ion Publishing, Inc. Periodicals postage paid at new immigration policies and not Califor- DenniS BAloG Appleton, WI and additional mailing offices. Post- master: Send any address changes to The New nia, though California has a similar law on Sent via e-mail AmericAN, P.O. Box 8040, Appleton, WI 54912. the books. California Penal Code Section 834b says: Send your letters to: the new AmericAn, P.O. The New AmericAN is pub- lished biweekly by Ameri- Box 8040, Appleton, WI 54912. Or e-mail: can Opinion Publishing (a) Every law enforcement agency in editorial@thenewamerican.com. Due to vol- Inc., a wholly owned subsidiary of The John California shall fully cooperate with the ume received, not all letters can be answered. Birch Society. United States Immigration and Natu- Letters may be edited for space and clarity. Call 1-800-727-TRUE to subscribe today! 5
  6. 6. Inside Track minnesota Governor Says no to obamacare Subsidies Minnesota Governor Tim Pawlenty is putting taxpayers’ money Other Minnesota Democrats have criticized Pawlenty’s order, where his mouth is. On August 31, he signed an executive order saying it “could cost the state at least tens of millions of dollars directing state agencies not to apply for any discretionary funds in potential grant money,” the AP reports. “By their calculation, under ObamaCare. Pawlenty already has rejected nearly $1.5 billion, including $1.4 In a statement, the Republican Pawlenty said, “Obamacare is billion to expand Medicaid health care for poor adults and $68 an intrusion by the federal government into personal health care million for a national high-risk pool for hard-to-insure people.” matters and it’s an explosion of federal spending that does noth- Pawlenty has been far from consistent in his opposition to fed- ing to make health care more affordable. To the fullest extent eral subsidies. He has accepted subsidies that are not connected possible, we need to keep Obamacare out of Minnesota. This with ObamaCare and is considering whether to accept Medicaid executive order will stop Minnesota’s participation in projects assistance that is not part of the legislation. His spokesman, Bruce that are laying the groundwork for a federally-controlled health- Gordon, said he is “likely” to take the money. care system.” As a result of such inconsistency, Pawlenty’s opposition to Pawlenty’s order describes ObamaCare as “a dramatic attempt ObamaCare is frequently seen as a political move to assist the to assert federal command and control over this country’s health Governor in his expected presidential run in 2012. That may be care system” that “includes unprecedented federal intrusions into the case. If so, it proves that opposing ObamaCare is considered individual liberty,” “massive new spending commitments,” “in- by Pawlenty to be a winning issue even two years down the road creased taxes and fees,” and “a multitude of programs and dem- — evidence that the law is deeply unpopular across the country onstration projects intended to speed the transition to federally- and is not expected to become more popular anytime soon. controlled health care.” Political or not, Pawlenty’s move to avoid a federal takeover of As his order indicates, Pawlenty had earlier refused to par- his state’s healthcare system is a welcome addition to the growing ticipate in ObamaCare’s early expansion of Medicaid, and the state nullification movement. August 31 order is therefore an extension of the state’s nonpar- ticipation in ObamaCare. It is also consistent with the position Tim Pawlenty expressed at a veterans event in St. Paul, as reported by Pawlenty the Associated Press: “Anything that I can do to slow down, limit or negate Obamacare, I’m going to try to do it within reason.” Minnesota’s Attorney General, Democrat Lori Swanson, fa- vors ObamaCare and has not joined the other State Attorneys General who are suing to overturn the law. On the other hand, seven of those same states are still lining up for their share of ObamaCare funds to cover retired state employees, according to the AP — precisely the opposite of Minnesota’s situation. AP Images obama claims End to “combat operations” in iraq President Barack Obama claimed August 31 in an Oval Office ad- people. That’s what we’ve done.” More specifically, Obama has dress to the nation that “tonight, I am announcing that the Ameri- organized an unprecedented militarization of the State Depart- can combat mission in Iraq has ended. Operation Iraqi Freedom ment, which has purchased armored personnel carriers and at- is over, and the Iraqi people now have lead responsibility for the tack helicopters as part of its growing “non-combat” role in Iraq. security of their country.” Tens of thousands of supposedly non-combat U.S. soldiers are But President Obama stressed that armed U.S. intervention remaining behind in Iraq, but Obama pledged that “all U.S. troops in Iraqi affairs is a long way from over. will leave by the end of next year.” He Obama stressed that even after the Iraq- Barack added: “As our military draws down, is choose a new coalition government, Obama our dedicated civilians — diplomats, “there should be no doubt:  The Iraqi aid workers, and advisers — are mov- people will have a strong partner in the ing into the lead.” This official transition United States. Our combat mission is from warfare in Iraq to welfare in Iraq, ending, but our commitment to Iraq’s which will be managed by Secretary of future is not.” State Hillary Clinton, will still include Obama emphasized that he had en- a lot of warfare. The militarized “advis- gaged in a plan for “redoubling our ers” and “diplomats” will be more nu- efforts to strengthen Iraq’s Security merous than at present and will often be Forces and support its government and toting heavy military equipment. AP Images www.TheNewAmerican.com 7
  7. 7. Inside Track obama’s new Stimulus Target: infrastructure Roads, airlines, and railways aren’t necessarily the unalloyed fiscal benefits they’re chalked up to be. Two generations ago, the French and British governments launched a visionary new program to usher jet transportation into the supersonic age. The much-ballyhooed SST (supersonic transport, better known as the Concorde) turned transatlantic flight into a thrilling, three hour adrenalin rush — for those willing and able to spend more than $10,000 to fly a route that, for a few hours more and in considerably greater comfort and less noise, cost a few hun- dred dollars. The Concorde never came close to living up to its promise, and three decades and countless billions of dollars of AP Images Obama in taxpayer subsidies later, it was finally abandoned after a Con- Milwaukee corde literally went down in flames at Charles de Gaul airport in July 2000. If it is true, as Albert Einstein is alleged to have said, that in- What about high-speed rail travel? For the record, high-speed sanity consists of doing the same thing over and over again and trains are a lot of fun to ride on, as anyone who has ridden Amer- expecting different results, then President Obama and his advi- ica’s only high-speed rail (the Acela that plies the northeastern sors may well be channeling the 20th-century physicist. After all, corridor from Washington to Boston) will attest. But they’re also the President is neither chastened nor enlightened following the very expensive, both to ride and to run, leaving aside the vast monumental failure of his multi-trillion dollar efforts to stimu- expenditures to set them up. It is both cheaper and faster to fly late the economy by spending taxpayer money. As his September from D.C. to Boston, even factoring in getting to and from the 6 speech at the Milwaukee, Wisconsin, Laborfest attested, he’s airport. France and Japan have both had vaunted high-speed rail going to try it yet again. systems for decades, which have become centerpieces in their In a widely anticipated pre-election initiative, Obama an- respective national tourism industries but have done nothing to nounced a new $50 billion dollar program to rebuild America’s actually enrich the French and Japanese economies. allegedly ailing transportation infrastructure. “Over the next six Politicians like President Obama love grand public transporta- years,” the President told an enthusiastic union crowd, many of tion projects — they are eye-catching, visionary, and a very high- whom would doubtless benefit directly from the welter of new profile way of putting people to work with government money proposed construction projects, “we are going to rebuild 150,000 (those “Your taxpayer dollars at work” signs, in all their varieties, miles of our roads — enough to circle the world six times. We’re were invented to garland such projects). But the bottom line is al- going to lay and maintain 4,000 miles of our railways — enough ways the bottom line. The fact that we know how to build 10-lane to stretch coast-to-coast. We’re going to restore 150 miles of run- freeways, supersonic transports, high-speed rails, or ultramodern ways and advance a next generation air-traffic control system to cable-stayed bridges to replace fuddy-duddy highways, conven- reduce travel time and delays for American travelers.” tional passenger jets, diesel trains, and suspension bridges does The proposal would include the installation of a new high- not necessarily mean that we should. speed rail system linking Milwaukee with Madison, the state None of which is to say that America must be content with capital, part of an ambitious program to create a national high- second-tier status. It means that a country’s greatness — ours or speed rail system that would allegedly save time, money, and any others — has little to do with the ability of its politicians to air quality. And to administer the funds for this latest stimulus spend money on public works. The illusion that national great- boondoggle, a new permanent “infrastructure bank” would be set ness flows from public greatness, as measured by politicians’ up “to leverage federal dollars and focus on the smartest invest- generosity with other people’s money, is a misconception at least ments,” whatever that might mean. as old as ancient Babylon. Governor brewer reacts to U.S. Human rights report In response to the State Department’s Human Rights report to ‘review’ by the United Nations is internationalism run amok that named Arizona as a violator of human rights for its pas- and unconstitutional.” sage of S.B. 1070, Arizona’s Governor Jan Brewer wrote Sec- The report in question included the Justice Department’s legal retary of State Hillary Clinton a scathing letter on August 27 challenge to S.B. 1070 as an example of how the federal govern- calling the reference “downright offensive” as well as “un- ment is safeguarding human rights. According to the report, “The constitutional.” issue is being addressed in a court action that argues that the federal Brewer wrote, “The idea of our own American government government has the authority to set and enforce immigration law. submitting the duly enacted laws of a state of the United States That action is ongoing; parts of the law are currently enjoined.” n 8 THE NEW AMERICAN • SEpTEMbER 27, 2010
  8. 8. QuickQuotes Death Dealt to mexicans Who refused to Help Drug Smugglers “The information we have at this moment is that it was an attempt at forced recruitment. It wasn’t a kidnapping with the intent to get money, but the intention was to force these people to participate in organized crime — with the terrible outcome that we now know.” Mexico’s chief security spokesman, Alejandro Poire, issued his as- sessment after the discovery on August 27 of the bound and blind- folded bodies of 72 massacred migrants who were trying to reach AP Images Texas through an area controlled by drug lords. Alejandro Poire Prominent iraqi Fears violence When U.S. Forces Depart “They are carrying out attacks when the Americans are still here, so just imagine what they can do after the Americans leave.” After insurgents unleashed a wave of attacks against fellow Iraqis, Wael Abdel-Latif, a former law- maker and judge, expressed strong apprehensions about what will happen in his country when all American military forces depart. novel method to avoid car Theft “Beware of poisonous snake!” A sign placed in the rear window of a car parked by an anonymous New York City resident succeeded in keeping would-be thieves from stealing the vehicle. cia Payments to afghan officials becomes an issue “This agency — acting in strict accord with American law — plays an essential role in promoting our nation’s goals in Afghanistan, including security and stability. Speculation about who may help us achieve that is both dangerous and counterproductive.” Neither confirming nor denying reports that the agency’s money has been buying intelligence and sup- port among Afghanistan’s government officials, CIA spokesman George Little addressed the matter after the arrest of Afghan official Mohammed Zia Salehi by the Afghan government. Gloomy Forecast about the U.S. Economy “The national economy is getting close to the edge of slow growth and slipping into no growth. Busi- nesses are now worried that the consumer won’t reenter the economy. Therefore, why expand?” Northeastern University economist Alan Clayton-Matthews believes that people who are worried about their jobs will be spending less and saving more. obama Era’s afghan Death Toll now Exceeds bush Era’s numbers “In 86 months, the total number of casualties in Afghanistan was 630 under the Bush command. Under Obama’s weak, waffling, hand-wringing, and navel-gazing command, in just 19 months, the U.S. casu- alty count as of August 31, 2010 is now at a total of 632 and counting.” Columnist Dave Poff pointed out that the casualty numbers have soared during numerous strategy reviews, changes of military leadership, alterations in the rules of engagement, and more. nevada’s “none of the above” alternative could Help Harry reid “Any vote not for Sharron Angle is a vote for Harry Reid. The Reid camp knows that and that’s why they’re running one of the most negative campaigns in history.” In Nevada, a voter can actually select “None of the Above” when voting. GOP challenger Sharron Angle’s spokesman, Jerry Stacy, fears that voter disgust prompted by the Reid camp’s negative ads would aid their candidate. President chides GoP, Defends making recess appointments “Until they do, I reserve the right to act within my authority to do what is best for the American people.” Addressing Republican refusal to confirm several of his nominees for federal posts, President Obama announced his intention to continue making appointments when the Senate is not in session so that his nomi- AP Images Barack nees do not have to undergo Senate confirmation. n Obama — compileD By John f. mcmAnuS Call 1-800-727-TRUE to subscribe today! 9
  9. 9. GLobaL Economy World leaders, American politicians, academics, and bankers are not only debating the feasibility of a world currency, they have the mechanisms in place to ensure its ascension. by Alex Newman elites have their way, America will move 1-22, 1944, to plan the post-war economic quickly toward accepting a planetary fiat order. Economist John Maynard Keynes I f all the advocates of a world fiat cur- currency issued by a world central bank. and the British government proposed the rency (a currency not backed by a pre- Calls for a new world monetary regime creation of a world currency called the “ban- cious commodity like gold) were to are nothing new. After World War II left cor,” and the U.S. government proposed a scream at once, workers in world capitals, the world’s financial system in disarray, world currency to be known as “unitas.” But business centers, colleges, and news media political leaders and financial gurus met at for a lot of reasons, mostly American reluc- may be deafened. And if global financial Bretton Woods, New Hampshire, from July tance, the schemes never took off. Instead, 10 THE NEW AMERICAN • SEpTEMbER 27, 2010
  10. 10. the Bretton Woods agreement resulted in Numerous other prominent na- the U.S. dollar — its value at the time tied tional leaders have jumped on the to gold — being crowned “the” world re- international fiat-currency band- The BIS, the central bank of central serve currency. But the dollar’s place as the wagon as well — too many to banks (which was almost disbanded unchallenged world currency began being list in a short article. But perhaps for supporting the Nazis), is becoming displaced with the dollar’s decoupling from more importantly, powerful cen- gold in 1971. A new system emerged: The tral bankers around the world are increasingly powerful, along with dollar retained its position as the world’s also pushing the issue. Former global financial regulatory institutions. reserve currency, but now it was backed Fed boss and current chairman not by gold, but only by trust and the fact of Obama’s “Economic Recov- And for Trichet, this is a positive that oil and other commodities were traded ery Advisory Board” Paul Volck- development. around the world in dollars. Since then, the er, for example, has long been a U.S. government has been growing itself strong proponent of a global fiat and its power through creating money via currency and a global central bank. He is eign Relations event, tax-dodging U.S. the inflationary power of the Federal Re- widely reported to have said, “A global Treasury Secretary Timothy Geithner, a serve, thus making the dollar increasingly economy needs a global currency.” And he regular proponent of global regulation, less stable, prompting vigorous calls for a has repeatedly called for such a system, after acknowledging that he had not read world currency to stabilize world financial hoping to see it emerge during his lifetime. it yet, said, “We’re actually quite open to markets. That has especially been true as In China, the “people’s” central-bank that.” The dollar immediately plunged. markets have imploded. boss Zhou Xiaochuan has also frequently And while Geithner promptly backtracked called for a new reserve currency. In a on his statement, as the saying goes, the leading the charge 2009 report published on the central bank’s cat was already out of the bag. Naturally, prominent globalist leaders and website entitled “Reform the International At a separate Council on Foreign Re- central bankers have been at the forefront Monetary System,” Xiaochuan explained lations event earlier this year, European of promoting world-currency schemes. that “the desirable goal of reforming the Central Bank boss Jean-Claude Trichet And they are confident that the ground- international monetary system, therefore, gave a speech entitled “Global Gover- work has been sufficiently laid to achieve is to create an international reserve cur- nance Today.” While different in impor- the goal. Russian President Dmitry Med- rency that is disconnected from individual tant respects from calls to empower the vedev has been among the most vocal nations and is able to remain stable in the International Monetary Fund as the world supporters. At the G-8 meeting last year, long run, thus removing the inherent de- central bank, which seems to be the con- he actually pulled a “united future world ficiencies caused by using credit-based sensus view on how to quickly achieve a currency” coin out of his pocket bearing national currencies.” world currency, Trichet offered a vision the words “unity in diversity.” Then, he When asked about the communist-Chi- that would ultimately lead to the same end. explained to the audience that it “means nese regime’s idea at a Council on For- “We need a set of rules, institutions, in- they’re getting ready. I think it’s a good sign that we understand how interdepen- dent we are.” In June of this year, he was “People’s” bank of china boss Zhou Xiaochuan, a communist, authored a report last year calling for a world fiat currency issued by the International Monetary Fund. at it again. “We are making plans for the future. We are talking about creating other reserve currencies, and we are counting on other countries to understand this,” Medvedev told an economic forum in St. Petersburg, Russia. At the same forum, French President Nicolas Sarkozy concurred, saying world powers “should think together about a new international currency system” at the upcoming G-20 summit. He also said the world’s financial system was “outdated” and should be replaced. “We all need to think about the foundations for a new in- ternational financial system,” he urged. “We’ve been based on the Bretton Woods institutions of 1945, when our American friends were the only superpower. My question is: Are we still in 1945? The an- swer here is, ‘no.’” AP Images www.TheNewAmerican.com 11
  11. 11. GLobaL Economy the level of ministers, gov- States’ version of a central bank — the Once there are fewer currencies and the ernors and heads of state or Federal Reserve — international authori- government. Second, the ties have become increasingly vocal about principal of supranational currency is establishment of the Global the supposed need for a world fiat currency established, such as has already occurred Economy Meeting of cen- controlled by a single world central bank. tral bank governors under The United Nations and the International with the euro, it becomes easier to simply the auspices of the [Bank Monetary Fund are the most prominent merge them. for International Settlements among them. And both of these quasi-gov- (BIS)] as the prime group ernmental institutions have recently issued for the governance of central reports blasting the dollar and calling for a formal groupings and cooperation mecha- bank cooperation. And third, the extension world fiat currency. nisms that we call ‘global governance,’” he of Financial Stability Board membership “A new global reserve system could be said, praising the progress that has already to include all the systemic emerging mar- created, one that no longer relies on the been made in “strengthening the mandate ket economies.” In other words, the BIS, United States dollar as the single major re- of existing international institutions” but the central bank of central banks (which serve currency,” said the UN’s World Eco- noting that “no market can survive without was almost disbanded for supporting the nomic and Social Survey for 2010. “The a set of rules. This is particularly true at Nazis), is becoming increasingly power- dollar has proved not to be a stable store the international level.” ful, along with global financial regulatory of value, which is a requisite for a stable In terms of the international monetary institutions. And for Trichet, this is a posi- reserve currency.” The new UN report said system, he applauded the fact that central tive development. that the IMF should be given the authority banks around the world were already “able He added, “Global governance is of the to print its own fiat currency, claiming that to take quick, decisive and coordinated ac- essence to improve decisively the resil- the new system “must not be based on a tion at short notice.” But “the crisis also ience of the global financial system,” and single currency or even multiple national showed that gaps in the system of global concluded by saying, “The crisis has driv- currencies but instead, should permit the governance — in terms of both efficiency en an historic change in the framework of emission of international liquidity — such and legitimacy — have to be filled,” he ex- global governance. In my view this trans- as [Special Drawing Rights] — to create plained, pointing out that the process was formation was overdue.” And indeed, the a more stable global financial system.” already ongoing. economic crisis has given a major boost to SDRs are “assets” issued by the IMF with “Overall, the system is moving deci- advocates of a world financial and mon- a value currently based on multiple na- sively towards genuine global governance etary regime. tional fiat currencies. that is much more inclusive,” Trichet said. Late last year, another UN report from “The significant transformation of global Global institutions a different arm of the institution offered governance that we are engineering today With the onset of the global financial cri- similar analyses and suggestions. “In the is illustrated by three examples. First, sis, which interestingly enough was large- discussion about necessary reforms of the emergence of the G20 as the prime ly brought on by an asset bubble caused the international monetary and financial group for global economic governance at via currency manipulation by the United system, the problem of the United States dollar serving as the main international reserve asset has received renewed atten- international monetary Fund tion,” said the report, published by the UN boss Dominique Strauss-Kahn, Conference on Trade and Development. an admitted socialist, is one of The paper also pointed to SDRs as the po- the most well-known advocates tential international reserve currency. of a global fiat currency issued Earlier in 2009, another UN panel by the institution he leads. also called for talks on setting up a new international monetary system and mov- ing away from the dollar. And the calls are only becoming more frequent and re- spected as time goes on. Then there is the International Mon- etary Fund, a likely candidate for the po- sition of global central banker, which in some ways has already taken on the role. Like other figures within the organization, IMF boss Dominique Strauss-Kahn — an avowed socialist — has repeatedly called for global regulation and a world currency controlled by the “Fund.” AP Images 12 THE NEW AMERICAN • SEpTEMbER 27, 2010
  12. 12. AP Images “One day, the fund might even be called upon to provide a globally issued reserve asset, similar to — but in impor- tant respects different from — the SDR,” he explained in a speech earlier this year, saying it would be “intellectually healthy to explore” the creation of a new IMF- backed world reserve currency before it is “needed.” A few months later, he told the High-Level Conference on the Interna- tional Monetary System that “crisis is an opportunity” and “a new global currency issued by a global central bank, with ro- bust governance and institutional features, could provide a nominal anchor and risk- free asset for the system.” And it’s not just Strauss-Kahn. In a barely noticed paper published in April of this year, the Fund went even further than President of the European central bank Jean-Claude Trichet is one of the primary the UN or Strauss-Kahn. It outlined the engineers of the emerging global-governance structure and an important coordinator of future global fiat currency, to be run by a global monetary policy. transformed and newly empowered IMF. The paper, published by the IMF’s ing one in West Africa, another in Central eign Relations’ magazine Foreign Affairs Strategy, Policy, and Review Department Africa, and a group of countries that use entitled “The End of National Currency” and entitled “Reserve Accumulation and the South African Rand. A plan to intro- offered some insight into the strategy International Monetary Stability,” offers duce a continental currency — sometimes being pursued. Benn Steil, the powerful very specific proposals which — not sur- referred to as the “afro” — controlled by group’s director of international econom- prisingly — would involve handing it mas- the already existing African Union’s Af- ics, suggests a very specific proposal: sive new powers over the global economy rican Central Bank is set for completion “Governments should replace national and “making the special drawing right in less than two decades. In Asia, calls currencies with the dollar or the euro or, (SDR) the principal reserve asset in the for a regional monetary union are grow- in the case of Asia, collaborate to produce [International Monetary System].” And ing stronger. Arabian nations, through the a new multinational currency over a com- this is merely the short-term policy; the Gulf Cooperation Council, are planning parably large and economically diversified IMF wants to go further, with the creation their own common currency right now. area.... Most of the world’s smaller and of a global currency called the bancor. In closer proximity to the United States, poorer countries would clearly be best off Of course, even the IMF says its a group of Caribbean nations formed the unilaterally adopting the dollar or the euro, schemes will not likely come about quick- Eastern Caribbean Currency Union. All which would enable their safe and rapid ly or easily. “It is understood that some of use the East Caribbean dollar. More re- integration into global financial markets. the ideas discussed are unlikely to mate- cently, a number of leftist Latin Ameri- Latin American countries should dollar- rialize in the foreseeable future absent a can regimes created the SUCRE under ize; eastern European countries and Tur- dramatic shift in appetite for international the leadership of socialist despot Hugo key, euroize.” cooperation,” it says in the report. Some Chavez. And a South American currency And that is precisely the argument of analysts have suggested a war with Iran or is currently in the works. Significant num- the most prominent global currency en- a crash of China’s economy could trigger bers of nations have also unilaterally aban- thusiasts. Columbia economics Professor such a shift. doned their own currencies and switched Robert Mundell, who could not be reached to the dollar, such as Ecuador and El Sal- by press time, is one of them. He is a No- Trend Toward monetary Unions vador. In Europe, while not officially join- bel-prize winner, a key advisor to the com- Monetary unions, where a collection of ing the Eurozone, numerous small coun- munist Chinese regime, and also known national governments surrender their tries have also switched to the euro. And as the “father” of the euro. And he argues power over money to international institu- this is exactly what many proponents of that the world should move toward a new tions, are popping up around the world. In a global fiat currency are promoting as a global currency system called the “DEY” recent decades, there has been a declining means to that end. Once there are fewer — a “basket” of dollars, euros, and yen number of currencies as more countries currencies and the principal of suprana- controlled and issued by a global central abandon their own currencies to use a tional currency is established, such as has bank, possibly a newly empowered IMF. multinational currency, such as the euro. already occurred with the euro, it becomes Eventually, the architecture would lead to Africa already contains a patchwork of easier to simply merge them. a truly global fiat currency. regional supranational currencies, includ- A 2007 article for the Council on For- “My approach is rather to start out with Call 1-800-727-TRUE to subscribe today! 13
  13. 13. GLobaL Economy possible routes. One is to con- the IMF is acting like a central bank be- tinue the current regionaliza- cause it’s leveraging its balance sheet,” he At recent G20 confabs, the centralization tion of currencies, to include told The New AmericAN, saying SDRs of the world’s monetary system has North America, and creation, could replace the dollar and become the expansion and merger of international reserve currency in two to indeed been a hot topic. Headlines monetary unions; and then five years. And it’s already going on. “In around the world announced the imminent combine those currencies into terms of paper currency, a leveraged bal- arrival of a “new world order,” a global one. Another is for smaller ance sheet, and the creation of liquidity countries to continue to ‘ize’ out of thin air, the IMF is clearly the way currency, a world central bank, and a their nations’ legal tender, as they’re going because, as I said, they’ve planetary monetary-policy regime. in ‘dollarize’ and ‘euroize.’ already done it.... It’s not speculation, it’s … Once the ‘tipping point’ is actually happening,” he said, noting that reached where one currency the shift away from dollars has already arrangements for stabilizing exchange supports approximately 40-50 percent of started and would accelerate. rates, and move from there to a global the world’s GDP, the movement will accel- The IMF has indeed taken some ex- currency. It would start off from the situa- erate to anoint that currency as the single traordinary steps recently. Last year, for tion as it is at present and gradually move global currency.” The organization’s target example, for the first time in the Fund’s it toward the desired solution. We could date: 2024. history, it issued bonds denominated in start off with the three big currencies in the Clearly, the move toward regional cur- SDRs. The Chinese regime promptly gob- world, the dollar, euro, and yen, and with rencies is picking up traction, especially bled up $50 billion worth, with the IMF specified weights, make a basket of them during this decade. saying in a statement that the sale “offers into a unit that could be called the DEY,” China a safe investment instrument” and Mundell explained in a 2005 speech called Already Emerging that it was part of a broader plan to “boost “The case for a world currency.” “The Some argue that the global central bank the Fund’s capacity to help its membership DEY could then become the platform on and all that it entails are already taking — particularly the developing and emerg- which to build a global currency, which I solid form or, worse, already here. ing market countries — weather the global shall call the INTOR.” “What the IMF is doing is, they’ve financial crisis, and facilitate an early re- His “basic plan” for the world currency positioned themselves and are actually covery of the global economy.” And of would be implemented in three stages, he beginning the process of issuing debt for course, there’s still more. said. First, stabilization of exchange rates. the first time,” explained James Rickards, “The other thing the IMF has done — not Next, a monetary union under the DEY senior managing director for market intel- for the first time, really for the second time, consisting of most of the world’s econo- ligence and co-head of threat finance and but the first time in quite a large size — is my. And finally, the creation of the INTOR. market intelligence at Omnis, a leading to issue SDRs,” explained Rickards. “The While Mundell acknowledged that it might consulting firm. “So what that means is IMF is issuing its own paper currency,” and, be difficult, he expressed optimism about the currency’s prospects, saying, “The next big crisis might be the occasion for a re- convening of a Bretton Woods type confer- ence to establish the conditions for a new international monetary system.” With the United States looking at a likely second round of economic turmoil and its dollar becoming increasingly unstable as interest payments on the national debt take up an ever larger part of all taxes collected, such a “crisis” is probably closer than Ameri- cans would like to imagine. Other prominent advocates agree with the Mundell strategy for achieving a world currency managed by a global central bank. “We’ll probably get there by the merger of monetary unions,” explained Morrison Bonpasse, founder and president of the Sin- gle Global Currency Association and author of The Single Global Currency: Common AP Images Cents for the World, in an interview with Finance Ministers and central bank bosses pose at the International Monetary Fund, the most The New AmericAN. “But there are several likely candidate to become a world central bank. In many ways, it has already taken on the role. 14 THE NEW AMERICAN • SEpTEMbER 27, 2010
  14. 14. like all fiat currencies, it’s backed by noth- ing, Rickards said. “I view all of these as pilot programs. In other words, they’re kind of testing the plumbing.... Now the IMF is positioned to — in effect, and I think this is the plan — to become a global central bank which can issue its own currency called SDRs, leverage its balance sheet through borrowing, and then create assets by making loans and investing in securities, all under the auspices of the IMF executive committee, which is basically the same set of people as the G20.” The mainstream media in the U.S. and around the world have been busily preparing At recent G20 confabs, the centraliza- humanity for the supposedly imminent and proper emergence of a global monetary regime. tion of the world’s monetary system has indeed been a hot topic. Headlines around the world announced — boldly and with A decade later, the New York Times took transformation into a bank of the world. good cause — the imminent arrival of a up the issue with a piece from prominent “Bowing to a new economic world order, “new world order,” a global currency, a CFR insider and global central bank pro- the IMF would grant fresh powers to the world central bank, and a planetary mon- moter Jeffrey Garten calling for a “global likes of China, India and Brazil. It would etary-policy regime. The early 2009 G20 Fed.” After praising the development of have vastly expanded authority to act as declaration, for example, said, “We have various unconstitutional institutions in a global banker to governments rich and agreed to support a general SDR alloca- the United States, most notably the Fed- poor,” wrote Post staff writer Anthony Faio- tion which will inject $250 billion into eral Reserve, Garten wrote, “The world la. “And with more flexibility to effectively the world economy and increase global needs an institution that has a hand on the print its own money, it would have the abil- liquidity.” In simpler terms, printing inter- economic rudder when the seas become ity to inject liquidity into global markets in national fiat money. stormy. It needs a global central bank.” a way once limited to major central banks.” Now, the regulatory regime is going Ten years after that, Garten penned a The article also mentioned “the IMF’s global, too. And fast. The same G20 piece for the Financial Times, once again transformation into a veritable United Na- meeting also led to the Financial Stabil- advocating “the establishment of a Global tions for the global economy” and quoted ity Forum being transformed into the Fi- Monetary Authority.” various experts praising the developments. nancial Stability Board, usurping financial In a 2008 Newsweek article entitled Even the supposedly more free-market- regulatory authority traditionally held by “We Need a Bank of the World,” Garten friendly press in the United States has also national central banks around the world. claimed, “The financial crisis is global, backed the scheme. “World money, with The new “board” is rapidly becoming a and only an international central bank can a world central bank, seems a next logi- global financial regulator as its mandate deal with it.” The piece called for world cal step,” wrote Wall Street Journal editor expands to include overseeing action to leaders to “begin laying the groundwork emeritus Robert Bartley in a 2003 opinion address vulnerabilities in the financial for establishing a global central bank” be- piece for the newspaper. “A world money system, setting guidelines, and even man- cause “the Fed no longer has the capability would be an extraordinary boon to inter- aging “contingency planning for cross- to lead singlehandedly.” national stability.” He was writing from border crisis management.” The year after that article, Garten was at Mundell’s monetary conference at his it again, this time in Businessweek. “If crit- castle in Italy. media Support ics could suspend the hyperventilating for The world elite is on a mission. Its plan No strategy for dramatic, unpopular a few minutes, they’d realize a global cen- to impose a global fiat monetary regime on change would be complete without a pub- tral bank is becoming a necessity in today’s humanity is well under way. And if serious lic media campaign. So, of course, among complex, interconnected world economy,” resistance is not mounted soon, the new the prominent voices throwing their he wrote. The piece also cites Tim “Tur- world monetary order could be just around weight behind a global fiat currency and boTax” Geithner, who said, “We need a the corner. n a global central bank are some of the most common global solu- influential media outlets in the world. Al- tion to these markets, ready in 1988, The Economist wrote an article predicting a global currency within not separate regional solutions.” EXTra coPiES availablE 30 years, saying, “This means a big loss of Meanwhile, the ➧ Additional copies of this issue of the economic sovereignty, but the trends that Washington Post ran new AmericAn are available at quantity- make the [new hypothetical global cur- a 2009 story prais- discount prices. To place your order, visit rency] so appealing are taking that sover- ing the International www.shopjbs.org or see the card between eignty away in any case.” Monetary Fund’s pages 34-35. www.TheNewAmerican.com 15
  15. 15. GLobaL Economy The dangers of money printing at the national level are bad enough, as evidenced by Zimbabwe, where the “money” eventually became totally worthless. through direct taxation. And of course, the fact that all federal reserve notes enter the economy as debt with interest attached (but never created) has led to a situation where it is literally mathemati- cally impossible to pay off the debt. In sum, the consequences of such a system have been disastrous for average Ameri- cans — hence the growing calls to audit and even end the Fed. But now, imagine such a system at the global level. And it isn’t just a mental ex- ercise; the global central bank is already emerging. As bad as the Fed has been for America — and indeed the world — a similar system at the international level would be far worse. Disaster might even be an understatement. international liquidity and inflation One of the most serious threats posed by a global central bank and world fiat currency is the fact that it would allow the emerging planetary regime to print AP Images its own money and finance its activities independently. That means wealth could be secretly siphoned away from all of hu- The Emerging manity to pay for armies, tax collectors, courts, bureaucracies, law enforcement, wealth redistribution, propaganda, and Global Fed much more. With no limits. But to advo- cates of such a system, that is one of its primary benefits. “A super-sovereign reserve currency not only eliminates the inherent risks of credit-based sovereign currency, but also Many of the world’s financial elites are excitedly pushing makes it possible to manage global liquid- ity. A super-sovereign reserve currency for a world fiat currency, but such a system would create managed by a global institution could be problems that would make our present ones seem tame. used to both create and control the global liquidity,” wrote Chinese central-bank boss Zhou Xiaochuan in his public paper by Alex Newman place of the market and causing massive calling for a world currency. “The central- malinvestment and generally an improper ized management of its member countries’ T he Federal Reserve has been a and unproductive allocation of resources. reserves by the Fund will be an effective nightmare for the American peo- The Fed also causes the boom-and-bust measure to promote a greater role of the ple. It inflates the money supply, cycle through its manipulations of the SDR [Special Drawing Rights, the Inter- thereby devaluing already-existing money currency and credit supply. It serves as national Monetary Fund’s first effort at a and placing a massive hidden tax on the the government’s partner in perpetually world currency] as a reserve currency.” Of people via rising prices. It also uses its expanding the “welfare-warfare state,” course, communists have always support- monopoly power to cause interest rates allowing the state to spend far more than ed control of “liquidity” (Karl Marx was to go up or down, usurping the rightful it could ever hope to reasonably raise a strong advocate of central banks with a Call 1-800-727-TRUE to subscribe today! 17
  16. 16. GLobaL Economy monopoly on currency and credit). But to the needs of countries.” It then promotes ment to supply its own money would free people who care about freedom and pros- worldwide central planning to “stabilize it from the constraints of having to raise perity, the communists’ support should be global output growth” by issuing more money through national contributions a huge red flag. SDRs or retiring them as the emerging or direct international taxation. But of The United Nations has also backed global government deems necessary. As course, printing all of this new “liquidity” global currency proposals for the same it stands, wealth redistribution around the and financing all of its ambitious projects reason. In a report earlier this year calling world is bad enough. Surrendering that would be inflationary by definition. And for the end of the dollar’s status as a re- power to a global institution would be a this inevitably would represent a massive serve currency and a new monetary regime nightmare. problem. controlled by the International Monetary In its report published earlier this year, Even John Maynard Keynes, the origi- Fund, the UN’s World Economic and So- the IMF also recently came out in favor nal proponent of the world currency called cial Survey for 2010 points out that, “Such of allowing it to print its own money to “bancor,” understood the concept well. In emissions of international liquidity could provide “international liquidity.” “A global 1919, he wrote in his book The Economic also underpin the financing of investment currency, bancor, issued by a global central Consequences of the Peace, “By a con- in long-term sustainable development.” bank would be designed as a stable store tinuous process of inflation, governments The term “sustainable development” — of value that is not tied exclusively to the can confiscate, secretly and unobserved, especially when used by the UN — is often conditions of any particular economy,” the an important part of the wealth of their used to refer to stronger central planning, paper says. “The global central bank could citizens.” population reduction, more land in gov- serve as a lender of last resort, providing To understand the effects, one can look ernment hands, and other ideas repugnant needed systemic liquidity in the event of to history and examine examples such as to average Americans and the U.S. Con- adverse shocks and more automatically what occurred in the Weimar Republic of stitution. Other schemes for “international than at present.” In laymen’s terms, the Germany, where the money supply was liquidity” could be even worse. IMF, with its power to “emit liquidity” inflated to such an extent, to finance gov- Hiding behind the passive voice, a sepa- out of thin air, would be empowered to ernment spending and war debt, that Ger- rate report by the UN Conference on Trade “bail out” companies, governments, and mans actually found their money more and Development adds in the concept of whomever it wished. If you thought the valuable to burn as fuel than to use to wealth redistribution: “It has been sug- Fed handing out trillions of dollars to the purchase items. Or, in more recent years, gested that in order for the SDR to become big banks and other insiders was bad, just the tragedy of hyperinflation in Zimba- the main form of international liquidity wait until a global central bank exercises bwe, where inflation exceeded millions and means of reserve holding, new SDR that power. of percent per year and it could cost a allocations should be made according to Allowing the emerging global govern- person billions of dollars for a loaf of bread, provides a more current warning. Even in America — with a comparably stable currency up until now — inflation has wreaked havoc on the economy and the lives of citizens, as we have become a country where mothers and fathers must both work to make ends meet. And these all happened in a world where there was still a check on unlimited inflation of fiat money — the fact that citizens could quit using it and purchase other curren- cies that were not losing their value as quickly. But under a global fiat monetary regime, there would be no such option. Economists who have been proven cor- rect over the decades about the economic consequences of creating money out of thin air are already sounding the alarm. “A world paper currency and world central bank would heighten the moral hazard and lead to a global inflationary regime such as AP Images we’ve never seen,” noted Lew Rockwell, the chairman of the Ludwig von Mises out-of-control money creation in the United States is leading to a loss of purchasing power that Institute. That is, the “easy” money and could eventually destroy the dollar’s position as the world reserve currency, ultimately leading to credit would cause people to borrow and a truly global fiat currency. spend way beyond their means, creating 18 THE NEW AMERICAN • SEpTEMbER 27, 2010
  17. 17. AP Images The euro, the world’s most prominent regional currency, provides an obvious example of what would happen under a global currency — calls for closer political and economic integration among nations. an unprecedented global bubble that would at some point inevitably burst. “There would be no escape from political control at that point.” And the consequences would be dire. “Inflation tears apart the whole fabric of stable economic relationships,” explained the legendary free-market economist Henry Hazlitt. “It leads men to demand totalitarian controls. It ends invariably in bitter disillusion and collapse.” closer integration and Total control Existing monetary unions are often seen complement the existing framework to en- week, “Among their many charges, critics as the model for a global currency by ad- sure fiscal sustainability in the euro zone will protest the establishment of ‘world vocates of such a system. But surrendering and enhance its capacity to act in times of government.’ But we have a World Trade control over money to supranational insti- crises.” Organization with legally binding pow- tutions has consequences, as the people Around the same time, IMF boss Dom- ers over trade disputes. We have a World of the Eurozone are discovering. For one, inique Strauss-Kahn joined the calls for Health Organization for communicable according to data compiled by the Euro- deeper integration in Europe, offering IMF disease with the ability to quarantine en- pean Central Bank, economic growth has funds with strings attached. “The launch- tire countries. And a World Court func- slowed dramatically in countries using the ing of the euro was only a first step,” he tions today that has considerable legal and euro since the introduction of that single explained. “You can’t have a single cur- moral clout.” Dismissing critics protesting currency — a phenomenon not observed rency without having a more coordinated the establishment of a world government in other areas of the world. economic policy.” And indeed, such eco- by pointing out that it already exists in ru- But more importantly, the goal of keep- nomic control will also lead to more politi- dimentary form is hardly likely to pacify ing the monetary union intact is leading cal control — just as we have seen with the those critics. to ever greater fiscal and political integra- transformation of the European Common But what would a global currency re- tion as rules are harmonized and author- Market into the European Union. ally mean aside from the destruction of the ity continues shifting from nations toward Obviously, if the euro is the model for dollar and the U.S. economy? “A global European institutions. During the height a world currency, the same phenomenon central bank would be a disaster,” financial of the crisis in Greece, other European would occur at the world level. That would guru Bob Chapman, editor of the Interna- governments were forced to bail out the mean closer integration among the nations tional Forecaster, told the new Ameri- Greek regime over fears that it could bring of the world, the vast majority of which cAn. “It means the acceptance of world down the euro. But on top of that, Euro- are ruled by totalitarian regimes of vari- slavery.” Chapman also pointed out that zone heads of state and government got ous varieties. A world fiat currency, then, the present international monetary system together and used the crisis as an excuse would be the surest way to accelerate the was being deliberately destroyed precisely for pushing deeper integration and the im- development of a true global government to bring about a global currency like the position of “economic governance” at the and the accompanying de- European level. struction of national sover- “We commit to promote a strong coor- eignty. But to planetary cur- A world fiat currency would allow the dination of economic policies in Europe. rency enthusiasts, that is a We consider that the European Council non-issue. emerging planetary regime to print its must improve the economic governance Noting that there would own money and finance its activities of the European Union and we propose be critics of the development to increase its role in economic coordina- of a world central bank, es- independently. That means wealth tion and the definition of the European pecially in America, Council could be secretly siphoned away from Union growth strategy,” announced the on Foreign Relations insider all of humanity to pay for armies, tax euro-area heads of state and government and global fiat currency pro- in a statement. “The current situation moter Jeffrey Garten points collectors, courts, bureaucracies, etc. demonstrates the need to strengthen and out in an article for News- www.TheNewAmerican.com 19

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