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BRICS Move To Replace Dollar With “Super-Sovereign” Global Currency
Brazil, Russia, India, China and South Africa launch attack to to replace the dollar with an single Chinese denominated “super-Sovereign” global currency.
As China is expected to rise to the status of a financial super power within the next 8 years and eclipse the US economy by 2020 Africa becomes center stage in the greatest currency war the world has seen since the 1930s which is now shifting into overdrive.
Brazil, Russia, India, China and South Africa, collectively known as the BRICS nations, are moving forward with their plan to unseat the US dollar from its throne as the global trade currency and to replace it with a Chinese denominated “super-sovereign” international currency.
This Geo-political game to establish global monetary dominance is by no means limited to the attack on the US dollar.
Instead this is merely the first strike of a concerted campaign of worldwide economic Read more…
Euro crisis and global downturn
Two latest forecasts, one by the UN and another by the IMF, warn of the threat of global downturn and recession in both 2012 and 2013. Unlike the IMF estimates of 3.3 per cent, the UN forecasts show that the growth will be 2.6 per cent only in the current year 2012. The previous forecasts of UN and the IMF for this year were 3.6 and 3.9 per cent respectively. Both predict growth in developed capitalist countries will be 1.2 to 1.3 per cent only amidst very high unemployment and extreme income inequality. They also reveal that countries like China and India will now face economic slow down which have been the locomotive of the global economy, especially since the financial crisis of 2008. These projections, however, do not assess the likely severe adverse effect of steep rise in the prices of petroleum products recently due to increased tensions in the Iranian Peninsula.
Nonetheless, there is broad consensus that despite abrupt withdrawal of fiscal stimulus and bail-outs playing some role in dampening the growth, the major culprit has been the Read more…
IMF sees 200 billion euro capital gap at European banks
BRUSSELS — The International Monetary Fund has estimated European banks could face a capital shortfall of 200 billion euros (US$287 billion), a European source said on Wednesday.
The figure has prompted a fierce response from European officials who said the analysis was misleading, according to the Financial Times.
The newspaper, citing two officials, said the 200 billion euro figure was one estimate of the impact of marking sovereign bonds to market.
The IMF will Read more…
The Central Banks and Gold
By Doug Hornig
If the mantra of the wise investor is “Buy low, sell high,” then those who run most of the Western world’s central banks must suffer from dyslexia.
These banks sold off their gold reserves for years, right into the teeth of a generation-long bear market. The last year before the sales began – i.e., during which central banks were net buyers of gold – was 1988, when the price of the metal fell from $485/oz. in early January to $410 at year’s end.
From then and right through the end of the century, they continued to sell as gold dropped steadily to its modern low of $250. The banks were in such haste to divest themselves of this disrespected relic – their single tangible asset – that it was deemed necessary to Read more…
UN wants new global currency to replace dollar
The dollar should be replaced with a global currency, the United Nations has said, proposing the biggest overhaul of the world’s monetary system since the Second World War.
In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises.
It added that the present system, under which the dollar acts as the world’s reserve currency , should be subject to a wholesale reconsideration.
Although a number of countries, including China and Russia, have suggested replacing the dollar as the world’s reserve currency, the UNCTAD report is the first time a major multinational institution has posited such a suggestion.
In essence, the report calls for Read more…
Central Banks Continue Buying Gold To Diversify Portfolios
Gold purchases by South Korea and Thailand this summer continue a trend in which central banks are net purchasers of the metal as they look to diversify their foreign-exchange reserves.
“So far in 2011, central banks in the emerging markets have already bought more than double the gold they bought in all of 2010, and we’ve got almost five months to go for the rest of the year,” said Jeff Clark, senior precious-metals analyst with Casey Research.
This buying has occurred despite historically high prices. “So apparently, central banks don’t regard the gold price as too high,” Clark said.
For the year to date, net purchases by the world’s central banks are 203.5 metric tons, which already is a 168% increase from 76 tons for all of 2010, said Natalie Dempster, director, government affairs, with the World Gold Council.
Most of the data is gleamed international financial statistics released by the International Monetary Fund at the beginning of each month. Additionally, some central banks—such as Read more…
Doing The Global Currency Shuffle
In mainstream financial circles, the concept of a global currency is often spoken of only with an atmosphere of caution. It is approached always in hypothetical terms. It is whispered of as some far off dream; a socio-economic moon landing in the far reaches of fiscal space. Perhaps in 2015, or 2020, or maybe 2050, but certainly never just over the horizon, or right around the corner posing as an innocuous trade asset created over 40 years ago and used only on rare occasions. Unfortunately, the development of a centralized global security representing the creation of a supranational economic body is much closer than many would care to admit…
The most common argument made in the mainstream against a global currency taking shape is the Read more…
Gold hits record high near $1,580 an ounce
The price of gold reached $1,578.73 an ounce at 1130 GMT on the London Bullion Market (AFP/File, Sebastian Derungs)LONDON — The price of gold surged to a record close to $1,580 an ounce here on Wednesday, as investors switched into the metal for safety from the eurozone debt crisis, traders said.
The price of gold reached $1,578.72 an ounce by mid-day on the London Bullion Market, beating the previous record of $1,577.57 set on May 1. It later stood at $1,573 an ounce in afternoon London trade.
“Gold hit a new all-time high today as investors continue to fret over the European sovereign debt situation,” said analyst Ian O’Sullivan at trading firm Spread Co, noting that the metal has risen for eight days in a row..
“With Italy, Spain, Ireland and Portugal worries intensifying and now the Fed minutes suggesting some members were thinking about the need for additional easing, investors have just hit the panic buy buttons this week.
“We think that gold ma Read more…
IMF chief calls on US to raise borrowing limit
WASHINGTON — The International Monetary Fund’s new chief foresees “real nasty consequences” for the U.S. and global economies if the U.S. fails to raise its borrowing limit.
Christine Lagarde, the first woman to head the lending institution, said in an interview broadcast Sunday that it would cause interest rates to rise and stock markets to fall. That would threaten an important IMF goal, which is preserving stability in the world economy, she said.
The U.S. borrowing limit is $14.3 trillion. Obama administration officials say the U.S. would begin to default without an agreement by Aug. 2.
“If you draw out the entire scenario of Read more…
Gold Rises As Greek Parliament Approves Austerity
Photo: Mike Herpel.Gold traded higher for a second day on word that the government of Greece will accept austerity measures despite the overwhelming rejection of the IMF and EU plan by the Greek people.
“By now we think (the Greek vote) should be priced and the gold price shouldn’t react to a large extent if the austerity package is really approved later in the day,” Commerzbank analyst Daniel Briesemann told Reuters.
Reuters reported that its 19-commodity index rose 1.7 percent on Tuesday, the most significant daily rise in nearly six weeks, driven primarily by the news from Greece.
In addition to boosting gold, the news pushed the euro up over the dollar. Speculation that the Greek crisis will not stop the European Central Bank from raising interest rates next week also contributed to the fall of the dollar, according to Bloomberg. The ECB raised Read more…
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