The world reserve currency is to Finance international trade and implementation for governments, the functions of the accumulation value. Before the Second world war it was the British pound sterling, but with the sunset of the British Empire, the pound lost its international importance and was supplanted by the dollar. Its appearance it received in the framework of the Bretton woods system of 1944.
All other currencies were unsecured, but pegged to the dollar, which in turn was tied to gold at the rate of 40 dollars per ounce and is payable by international trade partners.
Having the dollar as a reserve currency, the US had to export dollars. In the first years after the war mainly concerned Europe, receiving expression in the famous Eurodollar. Sounds great – print money and buy whatever you want. But with the "Gold window" it was a risk for excessive emissions could result in exchange of extra dollars back to gold, depleting the U.S. gold reserve.
Moreover, this had its own weakness, which could use dissatisfied with American hegemony. In 1967 leftist newspaper Mogul Jean-Jacques Servan-Schreiber wrote the famous tedious book "the American challenge", in which he argued that as a result of the unequal competition with the Americans, Europe is facing economic colonization.
France at that time was headed by de Gaulle, which the Anglo-American supremacy was never impressed. For the purpose of undermining he paid special attention to ensure that exchange [of gold] every dollar to which he could reach.
In the late sixties the situation got out of control because the Great society and the Vietnam war, very costly projects that were financed with budget deficits, leading to serious inflationary pressures, inflation that the US tried to export, which caused an excess of dollars abroad. Particularly unacceptable was the appreciation of the Deutsche mark. The Europeans started pressuring the US to shut down their deficits, what has brought the American Minister of Finance John Conally the famous cry that "the dollar is our currency and your problem".
But the situation is unsustainable and Nixon was forced to close the "gold window" to stop the process of exhausting American gold. It was the end of the Bretton woods system, and since then, major currencies floated freely on global currency markets.
But this has not prevented the dollar reserve currency status, as the Empire found it a different basis – she agreed with the House of Saud that in payment for oil was made only in dollars. The Saudis agreed to invest their dollar-denominated wealth in wall street, which further increased the profitability of the transaction for the Empire. Saudi Arabia controlled OPEC and the dollar was saved in international oil trading is financed by our dollars. Since that time, we have an informal black gold standard, known as the petrodollar.
This situation was better than before, because of excessive emission of the dollar for international trade or financing of various projects of the Empire now not punished and the depletion of gold reserves and could lead only to higher prices.
In the past decade, the problem of excessive printing of dollars was solved by the artificial increase in oil prices by using the hoax of Peak oil and stop Iraqi oil production. In a world of so much oil that when you free her booty she would put an end to energy monopoly money Power. The invasion of Iraq and the desire for control over the Middle East are aimed at curbing oil production. Suicidal decision to take Saddam for his oil, the Euro has only accelerated his end.
Even today, oil production in Iraq has not reached half the level it was prior to 1991. With Western oil companies at the helm it will probably never fully get back on my feet.
Through the higher prices the oil market was bound the excess dollars that are needed now to pay for oil. As a result, the dollar has remained relatively stable in its value. Of course, this fits well into the program of the beheadings of the middle class, and under this agreement higher oil prices also mean the constant increase of oil revenues invested in wall street.
Of course, it really plays into the hands of the Empire, because for real goods she can pay with his worthless paper. She is able to Finance its trade deficit to infinity.
Trade deficits are incorrectly understood as representing a problem.
From the point of view of the country, the goal of trade is not the export and the import. We export to pay for what we need from others. If you control the reserve currency, you don't need to export as much as you import, because you can partially Finance the imports of printed money. It is impossible for all other countries, and in a long term relationship, the trade deficit for them fatal, since it leads to net capital outflows.
But the Empire of the USA is going through difficult times. Its infrastructure is crumbling, its manufacturing base has ceased to exist, she abused power. To keep the peoples in subjugation to the dollar, it needs constant death threats, and in 1971 failed Connaly and fail today USA. The power of money ended up with the Empire and the dollar, and proceeds to the next phase. The dollar would have to retreat, and we are seeing a regrouping.
A new monetary order
China goes to the secured gold yuan, which will have great power in the international arena. Recently Australia, which with its 30% exports to China already fully depends on him, prepares the direct convertibility of the yuan and the Australian dollar. This means that it will no longer use US dollar to Finance bilateral trade, i.e. to perform the function of a reserve currency, it will require fewer dollars.
In 2001 business Executive of Goldman Sachs Jim O'neill coined the acronym BRIC. Later it was added to the South Africa, representing Africa and emphasizing the challenges it faces global challenges. It is clear that Russia and China, as two powerful neighbor, had a long-standing and important bilateral relations. But equally it is also clear that they have little in common with Brazil, India and South Africa. Actually, India and China are sworn enemies. However, in 2009 they organized the first summit. Just a week ago we heard that the BRICS are going to create a competitor to the IMF. They're still working out the details, and it is not yet a done deal, but the move seems very serious.
And, of course, there is the Euro, which, believe me, in great shape. Yes, the legitimacy of eurocrate suffers losses because of the crisis of the Euro, the currency is losing support even in Germany. But the Euro crisis is a product exclusively for internal consumption, designed to "dilute" the country's obedient acceptance of budget responsibility to Brussels. This is the last milestone on the way to a developed federalist superstate, the EU. Although the Euro is deeply hated, for the Power of money is not a problem: she is engaged in this business not to make friends, and she's not against a big fight. She is afraid only of these alternatives, but their not here. Nobody is proposing anything real, people are just letting off some steam. It's worth it to achieve a fiscal Union, the crisis will quickly come to naught. People have short memories.
The Euro was designed as a currency, which ultimately must be backed by gold and the ECB this business needs in order to be ready for the upcoming transition.
We observe the onset of a new monetary order. There will be several more or less equal blocks: a dollar zone, a zone of the yuan (the BRICS) and the Eurozone, the zone of the yen and the pound will be smaller entities. In the future they will be able to get closer for even more "cooperation" – in the inexorable March of the Power of money to the World currency.
These units will be at least partially backed by gold, implying long term deflationary pressures. Central banks in larger volumes buy gold, causing an interesting question, why for the last 18 months has increased the price of gold.
For the United States, managing the transition will be difficult. Home must return trillions of unnecessary dollars, and this will lead to very strong inflationary pressures within the country. It is not clear how this is going to fight the fed. Maybe it's her. Moreover, the United States may be in the worst of the new Gold-standard position. They allege in Fort Knox 8 thousand tons of gold, but really nobody trusts in it.
The fear of hyperinflation which the Austrians pump around "printing money" is ludicrous: we are experiencing a stagflationary depression and prices are rising due to speculation and not excess money. But when the dollar will lose its present status, long-term growth of prices will become the norm.
The great depression had just begun.
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