October 13th, 2010 09:55 EST
420 Banks Demand 1-World Currency
JEROME CORSI`S RED ALERT
By Dr. Jerome Corsi
(c) 2010 www.RedAlert.WND.com
Seen as remedy to looming exchange wars
In advance of the International Monetary Fund and World Bank meeting in Washington last weekend, the Institute of International Finance, a group that represents 420 of the world`s largest banks and finance houses, issued yet another call for a one-world global currency.
"A core group of the world`s leading economies need to come together and hammer out an understanding," Charles Dallara, the Institute of International Finance`s managing director told the Financial Times in London.
An IIF policy letter authored by Dallara and dated Oct. 4 made clear that global currency coordination was needed in the group`s view to prevent a looming currency war.
"The narrowly focused unilateral and bilateral policy actions seen in recent months - including many proposed and actual measures on trade, currency intervention and monetary policy - have contributed to worsening underlying macroeconomic imbalances," Dallara wrote. "They have also led to growing protectionist pressures as countries scramble for export markets as a source of growth."
Dallard encouraged a return to the G-20 commitment to utilize International Monetary Fund special drawing rights to create an international one-world currency alternative to the U.S. dollar as a new standard of foreign-exchange reserves.
U.N. calls for 1-world currency
A United Nations report released in July calls for the replacement of the dollar as the standard for holding foreign-exchange reserves in international trade with a new one-world currency issued by the International Monetary Fund.
The 176-page report titled "United Nations World Economic and Social Survey 2010," was issued at a high-level meeting of the U.N. Economic and Social Council and published in its entirety on the U.N. website.
"The risk of exchange-rate instability and a hard landing of the dollar could be reduced by having a global payments and reserve system which is less dependent on one single national currency," the report noted.
The solution the U.N. report recommended was expanding Special Drawing Rights, or SDRs, at the International Monetary System, with the goal of replacing the dollar as the accepted international standard for holding foreign-exchange reserves.
"A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency," the U.N. report said.
By placing this statement in print, the United Nations has formally gotten behind a plan that was first advanced by Robert Mundell, the creator of the euro, and later funded through the G-20 by the Obama administration, even though the plan to advance IMF SDRs ultimately means the death of the dollar as the world`s standard for international trade.
Let`s quickly review the background and the history of the issue.
What are IMF Special Drawing Rights?
SDRs are international reserve assets that are calculated by the IMF in a basket of major currencies that are allocated to the IMF 185 member nation-states in relation to the capital, largely in gold or widely accepted foreign currencies that the IMF member nation-states have on deposit with the IMF.
As Red Alert previously reported, the proposal originally advanced by China and Russia would issue SDRs to central banks of IMF member states far in excess of any gold or currency reserves the member states have on deposit with the IMF.
The idea is to utilize the little-understood and largely-ignored SDRs in a new capacity, as a sort of an international overdraft facility made available to bankrupt of financially failing IMF member nation-states, originated with Ted Turner, formerly a senior official at both the Federal Reserve and the U.S. Treasury.
The IMF created SDRs in 1969 to support the Bretton Woods fixed exchange-rate system.
"The international supply of two key reserve assets - gold and the U.S. dollar - proved inadequate for supporting the expansion of world trade and financial development that was taking place," a document on the IMF website explains. "Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF."
When the Bretton Woods fixed-rate system collapsed, major world currencies, including the dollar, shifted to a floating exchange-rate system where the price of the dollar and other major world currencies was created by trading on international currency exchanges.
Until the current global economic crisis, SDRs issued by the IMF have been used by IMF member nation states primarily as a reserve account to support international trade transactions, not as an alternative international currency available to settle international debt transactions in danger of default.
Fathers of the `1-world currency`
WND has previously reported that strong support for the idea of a one-world currency has come from Canadian economist and Nobel Prize winner professor Robert Mundell, an influential proponent who is credited with having formulated the intellectual basis for creating the euro.
Mundell, currently an adviser to China, was the originator of the suggestion that the IMF should utilize SDRs to replace the dollar as a new world standard for holding foreign-exchange reserves in international trade transactions.
WND has also reported Benn Steil, a senior fellow and director of international economics at the Council of Foreign Relations, wrote in the May/June 2007 issue of the Council of Foreign Relations` Foreign Affairs magazine an article titled, "The End of National Currency," in which his major conclusion was that "countries should abandon monetary nationalism."
Steil tempered his embrace of one-world currency, writing, "Governments should replace national currencies with the dollar or the euro or, in the case of Asia, collaborate to produce a new multinational currency over a comparably large and economically diversified area."
G20 meeting in London supported IMF 1-world currency
Red Alert also reported that the G20 summit meeting in London in April took an important step to create a new one-world currency through the International Monetary Fund that is designed to replace the dollar as the world`s foreign-exchange reserve currency of choice.
Appearing on Fox News` "The Sean Hannity Show," political consultant Dick Morris and Hannity agreed the decision by the G20 proved the "conspiracy theorists were right" and there is now clear evidence of a plan to create a one-world currency.
Point 19 of the final communiqu from the G20 summit in London on April 2, 2009, specified that, "We have agreed to support a general SDR which will inject $250 billion into the world economy and increase global liquidity," taking the first steps forward to implement China`s proposal that Special Drawing Rights at the International Monetary Fund should be created as a foreign-exchange currency to replace the dollar.
"I think the dollar is now under question," billionaire investor George Soros told CNBC, commenting that the goal was to create an IMF rather than the dollar to use in international trade.
Red Alert has also reported that the United Nations has supported the IMF plan, to utilize SDRs as an alternative to the dollar to settle international trade transactions.
Red Alert believes we are witnessing the death of the dollar under the Obama administration.
ABOUT THE AUTHOR: Jerome R. Corsi received a Ph.D. from Harvard University in political science in 1972. He is the author of the #1 New York Times bestselling books THE OBAMA NATION: LEFTIST POLITICS AND THE CULT OF PERSONALITY and the co-author of UNFIT FOR COMMAND: SWIFT BOAT VETERANS SPEAK OUT AGAINST JOHN KERRY. He is also the author of AMERICA FOR SALE, THE LATE GREAT U.S.A., and WHY ISRAEL CAN`T WAIT. Currently, Dr. Corsi is a Senior Managing Director in the Financial Services Group at Gilford Securities as well as a senior staff writer for WorldNetDaily.com.
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ABOUT RED ALERT: Jerome Corsi`s RED ALERT is your weekly, global financial strategies newsletter. Designed to be your guide to economic trends in the best of times and the worst of times, it is edited by New York Times best-selling author Jerome Corsi, Senior Managing Director of the Financial Services Group at Gilford Securities as well as a WND senior staff writer and columnist. For 25 years, Corsi worked with banks throughout the U.S. and the world developing financial services marketing companies to assist banks in establishing broker/dealers and insurance subsidiaries to provide financial planning products and services to their retail customers. Corsi developed three third-party financial services marketing firms that reached annual gross sales levels of $1 billion in annuities and equal volume in mutual funds. Corsi received his Ph.D. in political science from Harvard University in 1972.