US BANKS WARN OBAMA ON SOARING DEBT

df This is not going to happen but it highlights the high wire balancing act that must be maintained on our debt. We must continue to borrow to survive

Published: Wednesday, 27 Apr 2011 | 1:59 AM ET

By: James Politi, Financial Times

A group of the largest US banks and fund managers stepped up the pressure on Congress and the Obama administration to reach a deal to increase the country’s debt limit, saying that even a short default could be devastating for the financial markets and economy.

The warning over the debt limit is the strongest yet to come from Wall Street, highlighting growing nervousness among investors about the US political system’s ability to forge a consensus on fiscal policy. The most pressing budgetary issue confronting Congress and the Obama administration is the need to raise the US debt ceiling, which stands at $14,300 billion.

That threshold will be reached by May 16 and the Treasury department has said that in the absence of congressional action, the world’s largest economy could default by early July. Although such a scenario is still likely to be avoided, the looming deadline is stoking concerns within the financial industry.

“Any delay in making an interest or principal payment by Treasury even for a very short period of time would put the US Treasury and overall financial markets in uncharted territory and could trigger another catastrophic financial crisis,” said Matthew Zames, a JPMorgan executive, in a letter to Tim Geithner, the Treasury secretary, this week.

Mr. Zames was writing as chairman of the Treasury Borrowing Advisory Committee, which includes some of the largest investors in US government bonds, such as Bank of America Goldman Sachs Morgan Stanley, Pimco, RBS, Tudor and Soros Fund Management.

In the letter, Mr. Zames outlined several consequences of a default – or even an extended delay in raising the debt limit – that are causing jitters on Wall Street.

These included the dumping of US government debt by foreign holders !!!

and the downgrade of the US triple-A credit rating,

following last week’s move by Standard & Poor’s

to change its outlook on the US from “stable” to “negative”

for the first time in 70 years.

Other effects were a “run on money market funds”, such as the one that followed the collapse of Lehman Brothers in 2008, and a wave of “acute deleveraging”.

“Because Treasuries have historically been viewed as the world’s safest asset, they are the most widely used collateral in the world and underpin large parts of the financial markets. A default could trigger a wave of margin calls and widening of haircuts on collateral, which in turn could lead to deleveraging and a sharp drop in lending,” Mr. Zames said.

The letter was released 10 days before the launch of a new round of high-stakes fiscal negotiations to be led by Joe Biden, US vice-president.

Senior administration officials have said they have received assurances from Republican leaders that they understood the high stakes involved in the discussion on raising the debt ceiling and would avoid pushing the US towards default.

But Republicans remain adamant that they want to take advantage of the need to raise the debt limit in order to extract additional budget cuts – and stringent fiscal rules on government spending over the long term.

“If the president doesn’t get serious about the need to address our fiscal nightmare, there’s a chance [a debt ceiling vote] could not happen,” John Boehner, the Republican Speaker of the House, told Politico on Monday.

“But that’s not my goal.” “The world is watching, and while America must pay its bills, if we ask for more credit, we must prove worthy of it,” a spokeswoman for Eric Cantor, the House majority leader, told the Financial Times.

“That’s why President Obama, vice-president Biden and the leaders of their party are obligated to ensure that any debt limit increase is accompanied by serious reforms that immediately reduce federal spending and reverse the culture of debt hovering over Washington.”

Some budget analysts in Washington believe that a short-term extension of the debt limit, as long as it is worth less than $1,000 billion, could ultimately be agreed in order to give lawmakers a few more months to hash out a more lasting deal. But House Republicans – even amid mounting pressure from Wall Street – may well resist, depending on the details.

WHY THE DOLLAR'S REIGN IS NEAR AND END

For decades the dollar has served as the world's main reserve currency, but, argues Barry Eichengreen, it will soon have to share that role. Here's why—and what it will mean for international markets and companies.

Wall Street Journal's David Wessel sits down with three senior experts in international finance - Edwin M. Truman, Joseph E. Gagnon and Eswar Prasad - for a discussion on the major issues facing currencies and the global economy.

The single most astonishing fact about foreign exchange is not the high volume of transactions, as incredible as that growth has been. Nor is it the volatility of currency rates, as wild as the markets are these days. Instead, it's the extent to which the market remains dollar-centric.

The greenback, in other words, is not just America's currency. It's the world's. But as astonishing as that is, what may be even more astonishing is this: The dollar's reign is coming to an end. I believe that over the next 10 years, we're going to see a profound shift toward a world in which several currencies compete for dominance.

The impact of such a shift will be equally profound, with implications for, among other things, the stability of exchange rates, the stability of financial markets, the ease with which the U.S. will be able to finance budget and current-account deficits, and whether the Fed can follow a policy of benign neglect toward the dollar.

The Three Pillars

How could this be? How could the dollar's longtime most-favored-currency status be in jeopardy?

First, its allure reflects the singular depth of markets in dollar-denominated debt securities. The sheer scale of those markets allows dealers to offer low bid-ask spreads. This makes the dollar the most convenient currency in which to do business for corporations, central banks and governments alike.

Second, there is the fact that the dollar is the world's safe haven. In crises, investors instinctively flock to it, as they did following the 2008 failure of Lehman Brothers. This tendency reflects the exceptional liquidity of markets in dollar instruments, liquidity being the most precious of all commodities in a crisis. It is a product of the fact that U.S. Treasury securities, the single most important asset bought and sold by international investors, have long had a reputation for stability.

Finally, the dollar benefits from a dearth of alternatives. Other countries that have long enjoyed a reputation for stability, such as Switzerland, or that have recently acquired one, like Australia, are too small for their currencies to account for more than a tiny fraction of international financial transactions.

What's Changing

First, changes in technology are undermining the dollar's monopoly. Not so long ago, there may have been room in the world for only one true international currency. Given the difficulty of comparing prices in different currencies, it made sense for exporters, importers and bond issuers all to quote their prices and invoice their transactions in dollars, if only to avoid confusing their customers. Now, however, nearly everyone carries hand-held devices that can be used to compare prices in different currencies in real time.

Second, the dollar is about to have real rivals in the international sphere for the first time in 50 years. There will soon be two viable alternatives, in the form of the euro and China's yuan.

Americans especially tend to discount the staying power of the euro, but it isn't going anywhere. Contrary to some predictions, European governments have not abandoned it. Nor will they. They will proceed with long-term deficit reduction, something about which they have shown more resolve than the U.S. And they will issue "e-bonds"—bonds backed by the full faith and credit of euro-area governments as a group—as a step in solving their crisis. This will lay the groundwork for the kind of integrated European bond market needed to create an alternative to U.S. Treasurys as a form in which to hold central-bank reserves.

China, meanwhile, is moving rapidly to internationalize the yuan, also known as the renminbi. The last year has seen a quadrupling of the share of bank deposits in Hong Kong denominated in yuan. Seventy thousand Chinese companies are now doing their cross-border settlements in yuan. Dozens of foreign companies have issued yuan-denominated "dim sum" bonds in Hong Kong. In January the Bank of China began offering yuan-deposit accounts in New York insured by the Federal Deposit Insurance Corp.

Admittedly, China has a long way to go in building liquid markets and making its financial instruments attractive to international investors. We Westerners have underestimated China before. We should not make the same mistake again.

Finally, there is the danger that the dollar's safe-haven status will be lost. Foreign investors—private and official alike—hold dollars not simply because they are liquid but because they are secure. The U.S. government has a history of honoring its obligations, and it has always had the fiscal capacity to do so.

But now, mainly as a result of the financial crisis, federal debt is approaching 75% of U.S. gross domestic product. Trillion-dollar deficits stretch as far as the eye can see. And as the burden of debt service grows heavier, questions will be asked about whether the U.S. intends to maintain the value of its debts or might resort to inflating them away.

U.S. Impact

In this new monetary world, moreover, the U.S. government will not be able to finance its budget deficits so cheaply, since there will no longer be as big an appetite for U.S. Treasury securities on the part of foreign central banks.

Nor will the U.S. be able to run such large trade and current-account deficits, since financing them will become more expensive. On the other hand, the next time the U.S. has a real-estate bubble, we won't have the Chinese helping us blow it.

Dr. Eichengreen is the George C. Pardee and Helen N. Pardee professor of economics and political science at the University of California, Berkeley. His new book is "Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System." He can be reached at reports@wsj.com.

GOLD IS THE FINAL REFUGE AGAINST CURRENCY DEBASEMENT

States accounting for two-thirds of the global economy are either holding down their exchange rates by direct intervention or steering currencies lower in an attempt to shift problems on to somebody else, each with their own plausible justification. Nothing like this has been seen since the 1930s.

By Ambrose Evans-Pritchard Published: 6:01PM BST 26 Sep 2010

“We live in an amazing world. Everybody has big budget deficits and big easy money but somehow the world as a whole cannot fully employ itself,” said former Fed chair Paul Volcker in Chris Whalen’s new book Inflated: How Money and Debt Built the American Dream.

“It is a serious question. We are no longer talking about a single country having a big depression but the entire world.”

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The US and Britain are debasing coinage to alleviate the pain of debt-busts, and to revive their export industries: China is debasing to off-load its manufacturing overcapacity on to the rest of the world, though it has a trade surplus with the US of $20bn (£12.6bn) a month.

Premier Wen Jiabao confesses that China’s ability to maintain social order depends on a suppressed currency. A 20pc revaluation would be unbearable. “I can’t imagine how many Chinese factories will go bankrupt, how many Chinese workers will lose their jobs,” he said.

Plead he might, but tempers in Washington are rising. Congress will vote next week on the Currency Reform for Fair Trade Act, intended to make it much harder for the Commerce Department to avoid imposing “remedial tariffs” on Chinese goods deemed to be receiving “benefit” from an unduly weak currency.

Japan has intervened to stop the strong yen tipping the country into a deflation death spiral, though it too has a trade surplus. There is suspicion in Tokyo that Beijing’s record purchase of Japanese debt in June, July, and August was not entirely friendly, intended to secure yuan-yen advantage and perhaps to damage Japan’s industry at a time of escalating strategic tensions in the Pacific region.

Brazil dived into the markets on Friday to weaken the real. The Swiss have been doing it for months, accumulating reserves equal to 40pc of GDP in a forlorn attempt to stem capital flight from Euroland. Like the Chinese and Japanese, they too are battling to stop the rest of the world taking away their structural surplus.

The exception is Germany, which protects its surplus ($179bn, or 5.2pc of GDP) by means of an undervalued exchange rate within EMU. The global game of pass the unemployment parcel has to end somewhere. It ends in Greece, Portugal, Spain, Ireland, parts of Eastern Europe, and will end in France and Italy too, at least until their democracies object.

It is no mystery why so many states around the world are trying to steal a march on others by debasement, or to stop debasers stealing a march on them. The three pillars of global demand at the height of the credit bubble in 2007 were – by deficits – the US ($793bn), Spain ($126bn), UK ($87bn). These have shrunk to $431bn, $75bn, and $33bn respectively as we sinners tighten our belts in the aftermath of debt bubbles.. The Brazils and Indias of the world are replacing some of this half trillion lost juice, but not all.

East Asia’s surplus states seem structurally incapable of compensating for austerity in the West, whether because of the Confucian saving ethic, or the habits of mercantilist practice, or in China’s case by the lack of a welfare net. Their export models rely on the willingness of Anglo-PIGS to bankrupt themselves.

So we have an early 1930s world where surplus states are hoarding money, instead of recycling it. A solution of sorts in the Great Depression was for each deficit country to devalue, breaking out of the trap (then enforced by the Gold Standard). This turned the deflation tables on the surplus powers – France and the US from 1929-1931 – forcing them to reflate as well (the US in 1933) or collapse (France in 1936). Contrary to myth, beggar-thy-neighbour policy was the global cure.

A variant of this may now occur. If China continues to hold down its currency, the country will import excess US liquidity, overheat, and lose wage competitiveness. This is the default cure if all else fails, and I believe it is well under way.

The latest Fed minutes are remarkable. They add a new doctrine, that a fresh monetary blitz – or QE2 – will be used to stop inflation falling much below 1.5pc. Surely the Fed has not become so reckless that it really aims to use emergency measures to create inflation, rather preventing deflation? This must be a cover-story. Ben Bernanke’s real purpose – as he aired in his November 2002 speech on deflation – is to weaken the dollar.

If so, he has succeeded. The Swiss franc smashed through parity last week as investors digested the message. But the swissie is an over-rated refuge. The franc cannot go much further without destabilizing Switzerland itself.

Gold has no such limits. It hit $1300 an ounce last week, still well shy of the $2,200-2,400 range reached in the late Medieval era of the 14th and 15th Centuries.

This is not to say that gold has any particular "intrinsic value"’. It is subject to supply and demand like everything else. It crashed after the gold discoveries of Spain’s Conquistadores in the New World, and slid further after finds in Australia and South Africa. It ultimately lost 90pc of its value – hitting rock-bottom a decade ago when central banks succumbed to fiat hubris and began to sell their bullion. Gold hit a millennium-low on the day that Gordon Brown auctioned the first tranche of Britain’s gold. It has risen five-fold since then.

We have a new world order where China and India are buying gold on every dip, where the West faces an ageing crisis, and where the sovereign states of the US, Japan, and most of Western Europe have public debt trajectories near or beyond the point of no return.

The managers of all four reserve currencies are playing fast and loose: the Fed is clipping the dollar; the Bank of England is clipping sterling; the European Central Bank is buying the bonds of EMU debtors to stave off insolvency, something it vowed never to do just months ago; and the Bank of Japan has just carried out two trillion yen of “unsterilized” intervention.

Of course, gold can go higher.

420 BANKS DEMAND 1 WORLD CURRENCY

---

Posted: October 10, 2010
12:06 am Eastern © 2010

Editor's Note: The following report is excerpted from Jerome Corsi's Red Alert, the premium online newsletter published by the current No. 1 best-selling author, WND staff writer and senior managing director of the Financial Services Group atGilford Securities.

The Institute of International Finance, a group that represents 420 of the world's largest banks and finance houses, has issued yet another call for a one-world globalcurrency, Jerome Corsi's Red Alert reports.

"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.

An IIF policy letter authored by Dallara and dated Oct. 4 made clear that globalcurrency coordination was needed, in the group's view, to prevent a loomingcurrency 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.

Likewise, a July United Nations report called 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.

For more information on demands for a global currency, read Jerome Corsi's Red Alert, the premium, online intelligence news source by the WND staff writer, columnist and author of the New York Times No. 1 best-seller, "The Obama Nation."

Red Alert's author, who received a doctorate from Harvard in political science in 1972, is the author of the No. 1 New York Times best-sellers "The Obama Nation" and (with co-author John E. O'Neill) "Unfit for Command." He is also the author of several other books, including "America for Sale," "The Late Great U.S.A." and "Why Israel Can't Wait." In addition to serving as a senior staff reporter for WorldNetDaily, Corsi is a senior managing director in the financial-services group at Gilford Securities.

Disclosure: Gilford Securities, founded in 1979, is a full-service boutique investment firm headquartered in New York City providing an array of financial services to institutional and retail clients, from investment banking and equity research to retirement planning and wealth-management services. The views, opinions, positions or strategies expressed by the author are his alone and do not necessarily reflect Gilford Securities Incorporated's views, opinions, positions or strategies. Gilford Securities Incorporated makes no representations as to accuracy, completeness, currentness, suitability or validity of any information expressed herein and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its display or use.

BANKS BACK SWTICH TO RENMINBI (CHINESE CURRENCY) FOR TRADE.

If you have been following the type of economic cataclysmic events that could accompany the world and America if we switch away from the dollar as the worlds reserve currency then you will find this article breathtakingly alarming and much farther advanced than I ever dreamed of. This is the type of preemptive and protectionist move that China warned the U.S. about if we did not trim our national debt. Russia is making similar moves and the following two articles show there is allot of movement internationally away from the dollar.

This currency alternative is most importantly understood when one understands that in a time of crisis that's when the big changes are ushered in.

** After people being unable to access "The Financial Times" tools to to find the article I have put it here. All Credit goes to Financial Times. By Robert Cookson in Hong Kong.Published: August 26 2010 17:55

A number of the world’s biggest banks have launched international roadshows promoting the use of the renminbi to corporate customers instead of the dollar for trade deals with China. HSBC, which recently moved its chief executive from London to Hong Kong, and Standard Chartered, are offering discounted transaction fees and other financial incentives to companies that choose to settle trade in the Chinese currency.

“We’re now capable of doing renminbi settlement in many parts of the world,” said Chris Lewis, HSBC’s head of trade for greater China.

“All the other major international banks are frantically trying to do the same thing.”

HSBC and StanChart are among a slew of global banks –including Citgroup and JPMorgan – holding roadshows across Asia, Europe and the US to promote the renminbi to companies. The move aligns the banks favourably with Beijing’s policy priorities and positions them to profit from what is expected to be a rapidly growing line of business in the future.

The phenomenon will accelerate Beijing’s drive to transform the renminbi from a domestic currency into a global medium of exchange like the dollar and euro. Chinese central bank officials accompanied StanChart bankers on a roadshow to Korea and Japan in June. The bank held similar events in London, Frankfurt and Paris. Lisa Robins, JPMorgan’s head of treasury and securities services for China, said there had been a “spike in interest” from international clients.

An increasing number of Chinese companies have been asking foreign trading partners to accept renminbi as payment, said Carmen Ling, Hong Kong head of global transaction services at Citigroup. BBVASpain’s second-biggest bank, is also drawing up plans for a global marketing campaign that will focus on Latin American companies that export to China.

Banks started establishing renminbi trade settlement operations in mid-2009, when Beijing introduced a pilot scheme allowing companies to use the renminbi for trade outside China. The scramble has intensified in recent months as Beijing has substantially expanded the scheme – from a handful of Asian countries to the whole world – and introduced other liberalisations to its currency regime. Cross-border trade in renminbi totalled Rmb70.6bn ($10bn) in the first half of the year – about 20 times the Rmb3.6bn recorded in the second half of 2009.

But those figures remain tiny compared to the $2,800bn worth of goods and services that were traded across China’s borders last year, most of which was settled in dollars or euros. With renminbi trade settlement volumes expected to increase rapidly, banks are under pressure to establish a foothold in the nascent market and demonstrate to Chinese officials that they are committed to the scheme.

China has taken several steps in recent months to boost the international use of its currency and to establish Hong Kong, the special administrative region, as the global centre for offshore renminbi business.

McDonald’s, the US burger chain and icon of globalisation, took advantage of the new rules this month when it became the first foreign multinational to issue renminibi- dominated bonds in Hong Kong.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web. As I mentioned above. I only posted this after Friends could not access the Financial Times in the manner described. It is an excellent European financial paper.

CENSORED ECONOMIC NEWS

This is an important article. I should state from the outset this article came from “Pravda” the leading Russian press so it naturally has a bias that you will pick up on immediately. Yet it presents information that we generally will not get in America as well as the attitude outside our normal assumptions.

The U.S. currency has had its days as provost of international transactions and how to maintain currency reserves of countries. There is growing awareness that the world's central banks are directly propping up the criminal U.S. financial system to transfer their reserves in exchange for Treasury bonds and other notes. The transfer of reserves relieves fiscal deficit and finances eternal wars always being undertaken by the military-industrial complex housed in the Pentagon. The Project of the Sonoma State University of California nominated this topic for probable inclusion in the annual ranking of the 25 most censored news items in 2009/2010, to be published in the book Censored 2011, like every year by the publishing house Seven Stories of New York.

The big global media has not reported that there are several concrete initiatives to replace the U.S. dollar as world currency. Agreements have been adopted to bury the greenback-not reported by the mainstream press, in the Conference on Trade and Development of the UN (UNTACDA, for its acronym in English). On September 9, ALBA countries in Latin America, six nations in Asia, including Russia, and Iran also wants to get rid of the dollar, while the same urgency has been raised in other international forums.

In September 2009, the Conference UNTACDA proposed creating a new currency to replace the dollar as a reserve and redesign the "Bretton Woods style" of the current international monetary system. This initiative for a new currency would lead to the biggest monetary review since the Second World War. The resort of Bretton Woods in New Hampshire, served as head office to the Monetary and Financial Conference of the United Nations in 1944 and established the rules on trade and financial relations of the two industrialized countries in the postwar world and they decided to create the World Bank and International Monetary Fund and use the dollar as international currency.

Nations around the world have now reached their limit on subsidizing U.S. military adventures. The June 2009 meeting in Yekaterinburg, Russia, with the presence of world leaders such as Chinese President Hu Jintao, Russia's Dmitri Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan), also adopted the first formal measure of major U.S. trading partners to replace the dollar as world reserve currency.

If successful, the value of the dollar will plummet dramatically and the cost of imports such as oil will skyrocket suddenly and the U.S. empire cannot continue its wars. In addition, China has been negotiating deals with Brazil and Malaysia to assess conducting trade in the Chinese yuan, while Russia announced it will begin trading in rubles and local currencies. Moreover, Russia, India, Pakistan and Iran are forming a military financial area to try to force the U.S. out of Eurasia.

Nine Latin American countries also agreed on the creation of a regional currency, the sucre, outpacing the use of U.S. dollar. The nine members of ALBA (Bolivarian Alternative for the Peoples of Our America), a leftist bloc designed by Venezuelan President Hugo Chavez at a summit meeting held in October 2009 in Bolivia, is committed to further progress in the use of the sucre, the new unit of currency to replace the U.S. dollar as its currency in intraregional trade. The new medium of non-cash payment called Sucre, an acronym for Unified Regional Compensation Payments, started out in early 2010 as the accounting standard (not in paper money) among the member states of ALBA (Venezuela, Bolivia, Cuba, Ecuador, Nicaragua, Honduras, Dominican Republic, St. Vincent / Antigua and Barbuda).

The block also called to replace the International Center for Resolution of Investment Disputes (ICSID, its acronym in English) of the World Bank, in which arbitrations on misunderstandings or disagreements in international contracts have involved ALBA member nations in a morass of conflicts with some large transnational oil companies. Most ALBA members withdrew from the organization, and Ecuador also announced that they will leave the group.

Among the few media who reported this, was the story in the British outlet www.Telegraph.co.uk entitled "The UN wants a new global currency to replace the dollar." The economics editor Edmund Conway wrote on September 7, 2009 that the UNCTAD proposal was "the greatest revision of the world monetary system since the Second World War," adding that "this is the first time a major multinational institution has postulated such a suggestion." He said that "a number of countries, including China and Russia, suggested replacing the dollar as reserve currency of the world in a radical report of the UN Conference on Trade and Development." The UN report said: "The foreign exchange system and regulation of capital tied to the global economy is not working properly, and is largely responsible for the financial and economic crisis."

"The replacement of the dollar by an artificial currency would solve some of the problems associated with the potential of countries to wipe out large deficits and would help stability," said Detlef Kotte, one of the authors of the report. The proposals included in the UNCTAD annual report contain the most radical suggestions ever made for the network to redesign the global monetary system.

"The U.S. empire is ruined," wrote the columnist Chris Hedges on June 15, 2009 in www.TruthDig.com and www.CommomDreams.Org. Commenting on the meeting in Yekaterinburg (formerly Sverdlovsk, Russia), the Chinese President Hu Jintao, Russian President Medvedev and other top officials of the six-nation Shanghai Cooperation Organization, Hedges said, "Barack Obama and the Wall Street criminal class, aided by corporate media, continues peddling inane gossip and garbage masquerading as news, while we endure the biggest economic crisis in our history. They may have cheated us, but the rest of the world knows that we are ruined.

These nations are cursed if they continue to support keeping afloat an inflated U.S. dollar and sustaining massive federal budget deficits, swollen to over 2 trillion dollars, which finances U.S. imperial expansion in Eurasia and our system of casino capitalism . We are grabbed by the throat. It is at the point of being too tight."

The "substitution of the dollar for a conventional currency would solve some of the problems associated with the potential to wipe countries' large deficits and help stability," Kotte said. Although many economists have pointed out that the economic crisis was due to malfunction of the monetary system established in the agreements at Bretton Woods, so far no major institution, including the G20, has raised an alternative.

Note: This censored news arose from the investigation of the students Nicole Fletcher, Sonoma State University; Krystal Alexander, the Indian River State College, and Bridgette Grillo, the Diablo Valley College. It was validated by academics Ronald Lopez, Sonoma State University, Elliot D. Cohen, Indian River State College, and Mickey Huff, blo Day Valley College.

WHO OWNS THE US DOLLAR?

Again this an article from Provda on the simple understanding of the Federal Reserve. I may not agree with all of the material especially some of the attitudes but it gives a very simple insight into the Fed

At first glance, this would seem like a rather silly, stupid and pointless question. Why, the average person would answer, the American people own it. Or rather, if one had to get more technical, the American government, which is in turn, being a Republic, owned by the people, one in the same.

But, as most such simple seeming things in life, the truth is neither simple or straight forward and the answer is neither silly, stupid or pointless, but indeed is critical to the well being of nations and hundreds of millions if not billions of people.

For the truth of it, neither the people of America nor the government of America owns the US dollar. How's that, you say? Well, if one was to really dive just a bit deeper, before hitting the rocks just under the US greenback pond, one would quickly discover that the actual US dollar has not existed since 1913, where it was effectively killed. What is now called the US dollar is actually a Federal Reserve Note, says it right at the top of each bill. Why does that matter? Read on.

First of all, a US dollar, as something before 1913, was an instrument of wealth. That piece of paper, or just as common a gold or silver coin, had actual worth, anywhere in the world. It was worth its weight in gold, be it actual gold or paper. A Reserve Note, on the other hand, is a debt instrument, which not only is not wealth but is the opposite of wealth. Its very existence is a sucking sound on wealth, wealth being transferred, in this case not to the poor masses (as defined by defunct and unworking Marxism) but to the top 1% (equally defunct and unworking, but its only now starting to go that way).

How is that you say? Why quite simple, but for that answer, again, we must follow the rabbit down the rabbit hole. The Federal Reserve, unbeknownst to many outside the US and almost everyone in the US, is NOT a Federal, that is, government entity. It is about as governmental as Federal Express. In truth, it is a wholly private, untraded, and thus unsupervised, banking corporation, with a secret cabal of owners. One can assess some of those probable owners by those corporations/banks who were bailed out, while others were allowed to die.

Effectively, this private banking concern, the only one of its kind in the world, has the exclusive right to make the US dollar, or rather the Federal Reserve Notes (debt) called the US dollar, the one and only legal tender of America. Now, when the US government wants or needs money, it can not simply "have" money. Put aside the notions about not starting the printing presses and so on, the simple fact is, not only can the US government NOT coin currency, it can not just have it either. Remember, these are Reserve (debt) Notes.

So, when the US government wants money, the Treasury Department prints bonds (promissory notes aka debt obligations) and "sells" these to the Federal Reserve (private banking concern), which than "gives" the US government Federal Reserve Notes (tender). Thus the money the US government and thus in turn, the US people and all peoples and nations in the world who hold dollars (and why do you think they push these on the world so much?) are debt instruments owed to the Federal Reserve, by the holders. Thus, sooner or later you must return them, plus a percentage. Of course, to the Federal Reserve, the percentage is better.

But, let us take this one step further, and here is the really scary part. To note, no one's logic ever seems to go this far, so for many, this may be your final Eureka moment, when you figure out just how screwed and owned you really are.

If the only legal tender is the Federal Reserve Note and it must be paid back at its face value plus percent, again, in Federal Reserve Notes, well how do you do it? Let me explain. If the Fed offers you (like a crack dealer) $100 million Federal Reserve Notes and you must pay it back, sooner or later with a 2% add on, thus, let us say, in 1 year, you will owe and must pay $102 million Federal Reserve Notes, well, how do you do it? Simply put, you only have $100 million, where do you get the other $2 million Federal Reserve Notes? You can not print them, you can not mint them, well, you have no choice but to ask the Federal Reserve to print them. Thus you get your $2 million more to pay back the debt, but that itself has a 2% attachment, that again, you must ask the Fed to print and at a percentage and so on into perpetuity....well not really, because in a rather short order, the Fed and its owners will own everything.

Rarely has so brilliant and patient a ponzy scheme been dreamed up than this. And by exporting it overseas, they are sucking in the rest of the world's finance, into their ever greedy, chubby and purely evil little hands.

So, leaders of the world, why the bloody Hell, are you giving away the future of your peoples and nations to this tiny group of American parasites, who have already bleed the US dead dry, where the top 1% holds over 60% of that nation's raw wealth?