Currency Deals Threaten Supremacy of U.S. Dollar

35_Currency_Deals

• Swiss banks jump on China’s yuan bandwagon.

By Bill White —

Switzerland’s National Bank and the People’s Bank of China have reached an agreement to swap their respective currencies, meaning the trade between Swiss banking customers and China will no longer have to be mediated by banking systems depending on the United States Federal Reserve or European Central Bank (ECB).

This agreement is the latest of nearly two dozen China has made with central banks, including the ECB, the Bank of England and the Australian Central Bank, which allow for trade between the nations to use China’s currency, the yuan.

Before the agreements, someone with large amounts of national currency, like the Swiss franc, would have to route transactions through a bank in a third-party nation or the People’s Bank of China itself to obtain yuan or to exchange yuan for their national currency. Now, Swiss companies can exchange up to 150 billion yuan (21 billion Swiss francs) through the Swiss banking system.

These agreements by China are part of a strategy to limit U.S world influence and help present an alternative to the U.S.-led Bretton Woods system. Before 2009, when China began this push, most currency transactions went through the Federal Reserve, with the International Monetary Fund (IMF) providing loans to support national currencies. Among other things this meant the U.S. could isolate nations by denying them access to the Federal Reserve System to clear international transactions, a tactic recently used against Iran.

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Under China’s new regime, countries could continue trade with China and theoretically with nations in China’s exchange network, even if access to the U.S. banking system was terminated.

This news comes a week after China, Russia, Brazil, India and South Africa announced the launch of a new development bank and currency reserve designed to provide small nations with an alternative to the World Bank/IMF system.

China has pledged to Venezuela this week $40 billion in loans and economic aid to shore up the Venezuelan economy, loans Venezuela is repaying with 100,000 barrels of oil per day worth about $9.3 million on the international market.

In the past, America has been able to starve small nations like Venezuela or Argentina of dollars and cause substantial harm to their economies. Such nations have had to import heavily dollar-denominated contracts and have also, in the case of Argentina, exported dollars as interest payments on their bonds. Their domestic economies’ dollar-dependence has thus driven down exchange rates. A yuan alternative for such nations, backed by a steady supply of yuan from China, would transfer nations’ economic dependence from the U.S. to China.

Nations are only financially independent when they print their own currency, giving it value by accepting it for taxes and demanding its acceptance by foreigners. The alternative, which exists in most nations and the U.S., has a federally chartered private bank print currency only to fund loans, giving it value by accepting it as interest.

The former system is debt-free because the nation spends money into existence. The latter creates a never-ending debt cycle because money only comes into existence when it is lent.

When too many debts come due, the system collapses—which is why never-ending inflation, which planners hope will expand the money supply faster than payment is demanding, characterizes modern economies.

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Bill White is a freelance journalist and publisher based in Florida. He has also written articles for THE BARNES REVIEW (TBR) magazine. You can write him at: William A. White 201400005514 Seminole County Jail 211 Bush Blvd Sanford FL 32773.

6 Responses to Currency Deals Threaten Supremacy of U.S. Dollar

  1. Jaroslav Kukla says:
    Foolish Americans—our BIPOLAR world is on the move:

    The NEGATIVE USSR was moved by the International Jew-mason to Brussels/EU as the next Gulag of nations. And the old, former “positive” USA was moved to China, the next world leader and superpower. Your “Empire” on clay feet is sentenced by the Precession to the Dark Age, spiritually and economically. East is always RED and West is BLUE. Don’t you have RED Republicans and BLUE Demonrats as a ONE PARTY SYSTEM??? So does your UK ally, one party system of two, the same colors.

  2. Wolf Thom says:
    Peak Oil and 9.11. – read also Michael C. Ruppert’s book “Crossing the Rubicon – the decline of the American empire at the end of the age of oil” and watch his Internet Online Video “Collapse” for free!

    EIN NEWS – The LaRouche Movement for a New Glass Steagall Law against Collapse and a total reform of the financial markets

    Bilderberg

  3. peterpalms says:
    Did the Federal Reserve Launder $141 Billion Dollars Through Belgium to Hide Massive Increase In Quantitative Easing?

    Did the Fed Take Drastic and Covert Action to Hide a Large Country Dumping U.S. Bonds?

    That’s what former Assistant Treasury Secretary and Wall Street Journal editor Paul Craig Roberts alleges:

    Is the Fed “tapering”? Did the Fed really cut its bond purchases during the three month period November 2013 through January 2014?

    ***

    From November 2013 through January 2014 Belgium with a GDP of $480 billion purchased $141.2 billion of US Treasury bonds. Somehow Belgium came up with enough money to allocate during a 3-month period 29 percent of its annual GDP to the purchase of US Treasury bonds.

    Certainly Belgium did not have a budget surplus of $141.2 billion. Was Belgium running a trade surplus during a 3-month period equal to 29 percent of Belgium GDP?

    No, Belgium’s trade and current accounts are in deficit.

    Did Belgium’s central bank print $141.2 billion worth of euros in order to make the purchase?

    No, Belgium is a member of the euro system, and its central bank cannot increase the money supply.

    So where did the $141.2 billion come from?

    There is only one source. The money came from the US Federal Reserve, and the purchase was laundered through Belgium in order to hide the fact that actual Federal Reserve bond purchases during November 2013 through January 2014 were $112 billion per month.

    In other words, during those 3 months there was a sharp rise in bond purchases by the Fed. The Fed’s actual bond purchases for those three months are $27 billion per month above the original $85 billion monthly purchase and $47 billion above the official $65 billion monthly purchase at that time.

    ***

    Why did the Federal Reserve have to purchase so many bonds above the announced amounts and why did the Fed have to launder and hide the purchase?

    Some country or countries, unknown at this time, for reasons we do not know dumped $104 billion in Treasuries in one week.

  4. peterpalms says:
    Myth Accepted as History

    The accepted version of history is that the Federal Reserve was created to stabilize our economy. One of the most widely-used textbooks on this subject says: “It sprang from the panic of 1907, with its alarming epidemic of bank failures: the country was fed up once and for all with the anarchy of unstable private banking.” Even the most naive student must sense a grave contradiction between this cherished view and the System’s actual performance. Since its inception, it has presided over the crashes of 1921 and 1929; the Great Depression of ’29 to ’39; recessions in ’53, ’57, ’69, ’75, and ’81; a stock market “Black Monday” in ’87; and a 1000% inflation which has destroyed 90% of the dollar’s purchasing power.

    Let us be more specific on that last point. By 1990, an annual income of $10,000 was required to buy what took only $1,000 in 1914. That incredible loss in value was quietly transferred to the federal government in the form of hidden taxation, and the Federal Reserve System was the mechanism by which it was accomplished.

    Actions have consequences. The consequences of wealth confiscation by the Federal-Reserve mechanism are now upon us. In the current decade, corporate debt is soaring; personal debt is greater than ever; both business and personal bankruptcies are at an all-time high; banks and savings and loan associations are failing in larger numbers than ever before; interest on the national debt is consuming more than half of our personal income tax; heavy industry largely has been replaced by overseas competitors; we are facing an international trade deficit for the first time in our history; 75% of downtown Los Angeles and other metropolitan areas is owned by foreigners; and the nation is in economic recession.

    The government had encouraged widespread banking fraud during the War of 1812 as an expedient for paying its bills, and this had left the nation in monetary chaos. At the end of the war, instead of allowing the fraudulent banks to fall and letting the free market heal the damage, Congress decided to protect the banks, to organize the fraud, and to perpetuate the losses. It did this by creating the nation’s third central bank called the Second Bank of the United States.

    The new bank was almost an exact carbon copy of the previous one. It was authorized to create money for the federal government and to regulate state banks. It influenced larger amounts of capital and was better organized across state lines than the old bank. Consequently its policies had a greater impact on the creation and extinguishing of the nation’s money supply. For the first time in our history, the effects began to ricochet across the entire country at once instead of being confined to geographical regions. The age of the boom-bust cycle had at last arrived in America.

    In 1820, public opinion began to swing back in favor of the sound-money principles espoused by the Jeffersonian Republicans. But since the Republican Party had by then abandoned those principles, a new coalition was formed, headed by Martin Van Buren and Andrew Jackson, called the Democrat Party. One of its primary platforms was the abolishment of the Bank. After Jackson was elected in 1828, he began in full earnest to bring that about.

    The head of the Bank was a formidable adversary by the name of Nicholas Biddle. Biddle, not only possessed great personal abilities, but many members of Congress were indebted to him for business favors. Consequently, the Bank had many political friends.

    As Jackson’s first term of office neared its end, Biddle asked Congress for an early renewal of the Bank’s charter, hoping that Jackson would not risk controversy in a reelection year. The bill was easily passed, but Jackson accepted the challenge and vetoed the measure. Thus, a battle over the Bank’s future became the primary presidential campaign issue.

    Jackson was reelected by a large margin, and one of his first acts was to remove federal deposits from the Bank and place them into private, regional banks. Biddle counterattacked by contracting credit and calling in loans. This was calculated to shrink the money supply and trigger a national panic-depression, which it did. He publicly blamed the downturn on Jackson’s removal of deposits.

    The plan almost worked. Biddle’s political allies succeeded in having Jackson officially censured in the Senate. However, when the truth about Biddle’s strategy finally leaked out, it backfired against him. He was called before a special Congressional investigative committee to explain his actions, the censure against Jackson was rescinded, and the nation’s third central bank passed into oblivion.

    The Present fed was created in 1913 and is now 100 years old. Collapse is inevitable because all fiat and fractional banking systems have always collapsed because the end in hyper inflation and regular inflation of 64% every 20years and 99% every 45 years.

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