The Dying Dollar and the Rise of a New Currency Order
For years now, the collapse of the dollar has been in the cards.
Recent developments show mounting pressure on the dollar’s reserve
currency status. With a major international deflation going on, the
threat of inflation through money printing is unreal. However, should
the dollar’s reserve currency status end, the repatriation of trillions
of petro- and eurodollars could lead to a strongly inflationary
scenario.
The roles of a reserve currency are to finance international trade
and to function as a store of value for Governments. Until the second
world war it used to be the British pound, but with the demise of the
British Empire, the pound lost its international relevance and was
overtaken by the dollar. This was formalized in the 1944 Bretton Woods
system. All other currencies were fiat currencies, but pegged to the
dollar, which in turn was pegged to Gold at 40 dollars an ounce and
redeemable for international trading partners.
…
Conclusion
We are seeing the advent of the new currency order. There will be a
number of more or less equal blocks: a dollar zone, a Yuan/BRICS zone
and the euro, with the Yen and the Pound as lesser entities. These will
later be able to converge to even more ‘cooperation’, in the Money
Power’s relentless march towards World Currency.
These units will be at least partially Gold backed, implying long
term deflationary pressures. Central Banks are buying Gold in major
quantities, creating the interesting question why Gold prices have not
risen in the last 18 months.
…
The hyperinflation scare that the Austrians have been promoting
because of ‘money printing’ is ridiculous: we are in a stagflationary
depression and prices are rising because of speculation, not because of
excess money. But when the dollar loses its current status, long term
price rises will become the norm.
The Greatest Depression has only just started.
http://realcurrencies.wordpress.com/2013/04/07/the-dying-dollar/
CNBC: US Dollar Losing Reserve Status
The U.S dollar is shrinking as a percentage of the world’s currency
supply, raising concerns that the greenback is about to see its long run
as the world’s premier denomination come to an end.
When compared to its peers, the dollar has drifted to a 15-year low, according to theInternational Monetary Fund, indicating that more countries are willing to use other currencies to do business.
While the American currency still reigns supreme — it constitutes
$3.72 trillion, or 62 percent, of the $6 trillion in allocated foreign
exchange holdings by the world’s central banks — the Japanese yen, Swiss franc and what the IMF classifies as “other currencies” such as the Chinese yuan are gaining.
…
“If the dollar loses status as
the world’s most reliable currency the United States will lose the right
to print money to pay its debt. It will be forced to pay this debt,”
Bove said. “The ratings agencies are already arguing that the
government’s debt may be too highly rated. Plus, the United States
Congress, in both its houses, as well as the president are demonstrating
a total lack of fiscal credibility.”
Bove is not the only one sounding the reserve currency alarm, though
the issue has fallen off the front pages as hopes for a sustained U.S.
recovery have taken hold and the stock market has surged to near-record highs.
http://www.cnbc.com/id/100461159
Kyle Bass, who knows a thing or two about economics and finance,
recently spoke to a senior member of the Obama administration about
their planned solutions for fixing the U.S. economy and trade deficit.
When I asked a senior member of the Obama administration last week,
‘How are we going to grow exports if we won’t allow nominal wage
deflation?’
He says, ‘we’re just going to kill the dollar.’
http://www.thedailysheeple.com/economic-solution-senior-obama-official-we-are-going-to-kill-the-dollar_012013
U.S. Meat Processor in $4.7 Billion Sale to Chinese Company.
Shuanghui International Holdings Ltd., China’s biggest pork producer, agreed to acquireSmithfield Foods Inc. (SFD) for about $4.72 billion to boost supplies for the nation that’s the biggest consumer of the meat.
Closely held Shuanghui, parent of Henan Shuanghui Investment & Development Co. (000895),
will pay $34 a share for the Smithfield, Virginia-based producer, both
companies said today in a statement. The offer is 31 percent more than
yesterday’s closing share price.
China’s consumption of pork is rising with the expansion of its
middle class while there are questions being asked about the safety of
the country’s food supply. Smithfield’s livestock unit is the world’s
largest hog producer, bringing about 15.8 million of the animals to
market a year, according to the company’swebsite. It owns 460 farms and has contracts with 2,100 others across 12 U.S. states.
http://www.bloomberg.com/news/2013-05-29/shuanghui-group-said-to-near-agreement-to-buy-smithfield-foods.html
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