by Willem Middelkoop, The News Doctors:
After seven years of Chinese pressure, a plan allowing investors to exchange their U.S. Treasury holdings for SDRs through a ‘substitution fund’ is being discussed The Big Reset (2013) fully explains the need for a major reform of the world’s financial system.
At that time of publication, most people still had no clue what form the unfolding financial endgame would take. A few years further on, and as interest rates have reached a level not seen in 500 years, many are now starting to agree major monetary changes are needed urgently.
Two major problems need to be addressed. First we will need to find a new anchor for the world’s monetary system, and secondly, worldwide debt restructurings, comparable to debt jubilees in ancient times, have to be arranged. Debt jubilees are still a step too far in the current global mental state, hence full focus is on the structuring of a new anchor.
Since the outbreak of the financial crisis, the Chinese have pressured the U.S. to change the current dollar-based monetary system. The Chinese, ever more in the driving seat of global finance, have made it very clear that the Special Drawing Rights (SDR or IMF-money) of the IMF is the preferred future international world reserve currency. A great example of China’s frustration over U.S. monetary policies can be found in comments distributed by the Chinese official state press agency Xinhua a few years ago;
‘Politicians in Washington have done nothing substantial but postponing once again the final bankruptcy of global confidence in the U.S. financial system’
These words echoed complaints about the dollar from Zhou Xiaochuan, the most powerful Chinese central banker and governor of the People’s Bank of China (PBoC), shortly after the fall of Lehman Brothers. He claimed the dollar has led to increasingly frequent global financial crises since the collapse in 1971 of the Bretton Woods system, when president Nixon cancelled the gold backing of the greenback. In an article published on the PBoC’s website, in 2009, he called for ‘a sweeping overhaul of the global monetary system’ and proposed for the dollar to be replaced by the IMF’s Special Drawing Right (SDR).
The SDR, an international reserve currency (asset) created by the International Monetary Fund in the late 1960s, could serve ‘as the light in the tunnel for the reform of the international monetary system’, he believes.
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