Obama is being advised ... | Cartoonist RJ Matson; source & courtest - themoderatevoice.com | Click for image.
Having a central currency – let’s call it the Zhou-Triffin Doubloon (ZTD) – managed by a supra-national organisation would make it more difficult for any one country to get into too much debt to another. If the supply of ZTD in issue were controlled properly – say by expanding it in line with global GDP – it would serve as a steady store of value, with little risk of devaluation.
Moreover, a credible ZTD would have many of the advantages of the now-defunct gold standard. It would be strictly limited in supply and readily acceptable everywhere. Indeed, it would be even better than the yellow metal, which is after all too cumbersome for a modern economy and too scarce to serve as a measure for international trade. (via Paper gold: Nice idea, but…).
What would this mean …
A citizen’s nightmare like the IMF and World Bank, answerable to non-one, or at least less answerable than any ‘elected’ Government, would rule the world currency system.
This would also mean practically immediate nationalization of gold in most countries – and restrictions on private ownership of gold.
This will also finally end with mind numbing WTO type negotiations. The West will find newer and more devious ways to gain advantage; like the recent IPR-related seizures of pharma products shows.
Concentration Of Power
Today the most popular methods are the Fortune 500 listing and the Forbes listing. These listings finally show that half the world’s economic output is controlled by 50 people from 500 companies – about 25,000 people. Add another 25,000 politicians and bureaucrats. We have about 50,000 people managing the lives of 5 billion people.
Is this how debts will be repaid? Image source & courtesy - telegraph.co.uk | Click for image.
Everyone is saying …
There is rising chorus that President Obama should do what Roosevelt did. Krugman, this year’s Nobel prize winners, also said in an interview that Roosevelt’s actions need to be emulated. And what is it that Roosevelt did …?
Roosevelt nationalized gold.
Apart from a lot of things that Roosevelt did, which can be debatable, this was the one thing that he did, that made the US into a super power – for a short while (of 70 years).
And the nationalization of gold also impoverished the Americans. Nationalization of gold enabled the US Governments to enter costly wars like WW2, Vietnam War, and now the Iraq and Afghan Wars. This allowed to US to walk into the WW2 with 25,000 tons of gold – and impose Bretton Woods on the world.
The Anglo-Saxon Bloc controlled gold production (from Ghana, South Africa, Australia, Canada, Papua New Guinea, America, etc.,) was – and the world’s largest private reserves of gold, of India was controlled by the British. It is this choke on gold reserves that enabled the sustenance of US as a superpower.
And now they are trying it again.
Finger pointing ... | Economist cartoon by KAL on 08-08-03; Source & courtesy - adamsmith.wordpress.com | Click for image.
Many Think … That There Are Many More Qualified …
Paul Krugman has been (allegedly) anti-Obama – and advising Obama to pay heed to Roosevelt’s policies. Was Krugman’s Nobel Prize award to help him to increase his ‘opinion making’ powers? Was the Nobel prize fixed to meet American /Western short-term requirements? Was the Nobel prize given to the Paul Krugman to make his position strong – as a part of the Obama Dream Team – or as ballast against an ‘adventurous’ Obama who may not toe the line?
Will Krugman join Warren Buffet in rescuing the Western economic system? Will they nationalize gold again – and instead promote silver? Is a new version of the bi-metallic standard coming?
All that's left ...
Post dated cheque on a falling bank …
Gandhiji advised Sir Stafford Cripps to take the next plane back and his offer as “post dated cheque on a falling bank” – which he later denied as having said it at all, though in agreement with the thought.
And that is equally true of the US in particular and the West in general.
And one single global currency, is such a bad idea.