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Of Interest to Investors, Survivalists and Others Concerned About Their

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With a focus on the Plutocrats, Goldsmiths, Super-Rich Insiders, and their Allies and

what they are conspiratorially doing to manipulate the financial markets, make more

profits, rip us off and install a world government under their control

The Goldsmiths—Part LV

By R. D. Bradshaw

There have been several news reports this past week on the upcoming G20 meeting in London on April 2d. Perhaps the Chinese and Russians have been the most noteworthy in their plans for a new world reserve currency to replace the dollar. The Russians have had a focus on a basket of currencies or regional currencies which would open the door for the Russian ruble to gain a par status with the dollar and other key currencies.

For a while, it looked like the Chinese would back the Russian approach. However, as late as March 24, 2009, a report from London’s Financial Times offered more details on something the Chinese broached lightly a few days ago on a push for a resurrection and new role of power for the Special Drawing Rights.

This Financial Times article, by Jamil Anderlini, was on “China calls for new reserve currency.” The article quoted Zhou Xiaochuan, China’s central bank’s governor. He wants the new reserve currency to be controlled by the International Monetary Fund. While much of the former talk has been on regional currencies and/or basket of currencies, the Chinese proposal is for a powerful new role for the Special Drawing Rights (SDR). These SDRs are now based on four currencies-the US dollar, the Japanese yen, the euro and the British pound. They are used largely as a unit of account by the IMF and other international organizations.

China wants to expand the basket of currencies forming the basis of the SDR valuation. China wants the valuation to include all major currencies (presumably to include the Chinese yuan and the Russian ruble). China also wants a settlement system between the SDRs and other currencies so that they can be freely used in international trade and financial transactions. The SDRs would be managed by the IMF and would gradually replace existing reserve currencies.

The Times quoted Mr. Zhou as saying that the proposal would require “extraordinary political vision and courage.” He also acknowledged a debt to John Maynard Keynes, who made a similar suggestion in the 1940s. As is known by many people, Keynes was the father of deficit spending and the demise of gold.

Backdrop on the SDRs

These SDRs came into usage in 1969. It was envisioned then that they would become the paper international currency used in international trade and especially in the settlement of accounts. But since the scheme involved a give away of these SDRs to key central banks (which are owned by the huge international banks), the plan never really was acceptable around the world. By the 1970s, dissatisfaction over the SDRs set in to limit their use and acceptance globally.

Wikipedia gives this backdrop on the purpose and current use of the SDRs: “SDRs are used as a unit of account by the IMF and several other international organizations. A few countries peg their currencies against SDRs, and it is also used to denominate some private international financial instruments. For example, the Warsaw convention, which regulates liability for international carriage of persons, luggage or goods by air uses SDRs to value the maximum liability of the carrier…

“SDRs were originally created to replace Gold and Silver in large international transactions. Being that under a strict (international) gold standard, the quantity of gold worldwide is relatively fixed, and the economies of all participating IMF members as an aggregate are growing, a perceived need arose to increase the supply of the basic unit or standard proportionately. Thus SDRs, or ‘paper gold’, are credits that nations with balance of trade surpluses can 'draw' upon nations with balance of trade deficits.

“So-called ‘paper gold’ is little more than an accounting transaction within a ledger of accounts, which eliminates the logistical and security problems of shipping gold back and forth across borders to settle national accounts.

“Joseph Stiglitz has argued that usage by central banks of SDRs as foreign exchange reserve could be viewed as the prelude to the creation of a single world currency. It must be understood that Gold and Silver have filled the role as global currencies for several thousand years of recorded history…Support for SDRs in the global finance system has historically been very weak, as other fiat currencies have largely supplanted the SDR as value storage mechanisms…

“The value of one SDR in terms of United States dollars is determined daily by the IMF, based on the exchange rates of the currencies making up the basket, as quoted at noon at the London market. (If the London market is closed, New York market rates are used; if both markets are closed, European Central Bank reference rates are used.)”

My Analysis of this latest development from China

These articles on Chinese proposals for the use of the fiat, paper SDRs as a new global reserve currency would please the plutocratic international bankers. This move would allow them a golden opportunity to print fiat paper money in huge quantities to flood the world. We can be sure that the fat cats would love to have a new paper world currency in their greedy little hands. Since they already control the IMF and most world central banks, such a new global currency would definitely fit into their plans for world rule.

For sure, this adventure would put the Western plutocrats into even more of a world ruling posture. It’s hard for me to fathom that the Chinese would willingly give up any hope of having financial independence from the international bankers in the Christian West. It looks like lessons from history would sink in on the Chinese of how the fat cat money masters in Europe exercised hegemony over China for ages before the Communist came to power in the late1940s and took over control of China. The push for Western control was the story behind the British seizure of Hong Kong and the British-Chinese Opium wars in the 1830s.

As late as 1900, plutocrats from Europe were still trying to control China. This conflict set the stage for a story and even a Charlton Heston movie on “55 Days at Peking.” If China is floating a resurrection of SDRs, it certainly plays into the hands of the plutocratic masters running the financial markets. It’s hard to imagine why the Chinese would even entertain this idea. The fact that she is floating it would suggest that some back room deal has been made by the plutocrats and the Chinese Communist leadership.

As a minimum, any carry forward of this scheme would mean a serious dent in the future role of gold and a boost up for world government and a new world paper currency. If this plan reaches fruition, we may see a fantastic collapse in the price of gold and other precious metals.

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Disclaimer: None of the above is for investment advice. It is for information purposes only.

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