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  • Gulf monetary union deal more or less final -UAE
    is more or less final UAE Central Bank Governor Sultan bin Nasser al Suweidi said on Thursday The draft agreement is more or less final except for some typing errors he told reporters in Dubai Gulf finance ministers and central

    Original URL path: http://www.911omissionreport.com/gulf_union.html (2016-02-14)
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  • Now Africa heads toward continental government
    the eco a common currency designed to be issued by the West African Economic and Monetary Union is now rescheduled to be issued in July 2009 after failing to materialize through earlier efforts The United Nations has strongly supported the African Union as a major solution for the war poverty famine and disease which have plagued the continent for decades Prof Adebayo Adedeji a former executive secretary of the U N Economic Commission for Africa has observed successful economic integration in Africa will require successful political integration The African Union Mission in Sudan or AMIS is an AU military force currently operating in Sudan attempting to play a peacekeeping mission in Darfur Operating under U N Security Council Resolution 1564 AMIS is tasked to coordinate with the U N Mission in Sudan Jendayi Frazer U S State Department assistant secretary for African Affairs testified to the House Internal Relations Committee on May 18 2006 that strengthening AMIS is critical to the Bush administration s plan to end the genocide in Darfur The United Nations is a long standing supporter of regional integration in Africa U N Deputy Secretary General Asha Rose Mtengeti Migiro told the AU summit in Accra Ghana on July 1 We remain committed to assisting this process We will continue to do so by helping to identify ways to accelerate integration by monitoring the progress being made in the various regional economic communities and by supporting efforts to overcome obstacles to closer union Abdoulie Janneh U N undersecretary general and executive secretary of the Executive Council of the African Union addressed the Executive Council of the AU on June 28 in Accra stating that Africa is once again at the crossroads Janneh told the council the Great Debate on an African Union Government is very important and

    Original URL path: http://www.911omissionreport.com/african_union.html (2016-02-14)
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  • The End of National Currency
    appropriate domain of the currency area It might seem at first that the question is purely academic he observes since it hardly appears within the realm of political feasibility that national currencies would ever be abandoned in favor of any other arrangement Mundell goes on to argue for flexible exchange rates between regions of the world each with its own multinational currency rather than between nations The economics profession however latched on to Mundell s analysis of the merits of flexible exchange rates in dealing with economic shocks affecting different regions or countries differently they saw it as a rationale for treating existing nations as natural currency areas Monetary nationalism thereby acquired a rational scientific mooring And from then on much of the mainstream economics profession came to see deviations from one nation one currency as misguided at least in the absence of prior political integration The link between money and nationhood having been established by economists much in the way that Aristotle and Jesus were reconciled by medieval scholastics governments adopted OCA theory as the primary intellectual defense of monetary nationalism Brazilian central bankers have even defended the country s monetary independence by publicly appealing to OCA theory against Mundell himself who spoke out on the economic damage that sky high interest rates the result of maintaining unstable national monies that no one wants to hold impose on Latin American countries Indeed much of Latin America has already experienced spontaneous dollarization despite restrictions in many countries U S dollars represent over 50 percent of bank deposits In Uruguay the figure is 90 percent reflecting the appeal of Uruguay s lack of currency restrictions and its famed bank secrecy This increasingly global phenomenon of people rejecting national monies as a store of wealth has no place in OCA theory NO TURNING BACK Just a few decades ago vital foreign investment in developing countries was driven by two main motivations to extract raw materials for export and to gain access to local markets heavily protected against competition from imports Attracting the first kind of investment was simple for countries endowed with the right natural resources Companies readily went into war zones to extract oil for example Governments pulled in the second kind of investment by erecting tariff and other barriers to competition so as to compensate foreigners for an otherwise unappealing business climate Foreign investors brought money and know how in return for monopolies in the domestic market This cozy scenario was undermined by the advent of globalization Trade liberalization has opened up most developing countries to imports in return for export access to developed countries and huge declines in the costs of communication and transport have revolutionized the economics of global production and distribution Accordingly the reasons for foreign companies to invest in developing countries have changed The desire to extract commodities remains but companies generally no longer need to invest for the sake of gaining access to domestic markets It is generally not necessary today to produce in a country in order to sell in it except in large economies such as Brazil and China At the same time globalization has produced a compelling new reason to invest in developing countries to take advantage of lower production costs by integrating local facilities into global chains of production and distribution Now that markets are global rather than local countries compete with others for investment and the factors defining an attractive investment climate have changed dramatically Countries can no longer attract investors by protecting them against competition now since protection increases the prices of goods that foreign investors need as production inputs it actually reduces global competitiveness In a globalizing economy monetary stability and access to sophisticated financial services are essential components of an attractive local investment climate And in this regard developing countries are especially poorly positioned Traditionally governments in the developing world exercised strict control over interest rates loan maturities and even the beneficiaries of credit all of which required severing financial and monetary links with the rest of the world and tightly controlling international capital flows As a result such flows occurred mainly to settle trade imbalances or fund direct investments and local financial systems remained weak and underdeveloped But growth today depends more and more on investment decisions funded and funneled through the global financial system Borrowing in low cost yen to finance investments in Europe while hedging against the yen s rise on a U S futures exchange is no longer exotic Thus unrestricted and efficient access to this global system rather than the ability of governments to manipulate parochial monetary policies has become essential for future economic development But because foreigners are often unwilling to hold the currencies of developing countries those countries local financial systems end up being largely isolated from the global system Their interest rates tend to be much higher than those in the international markets and their lending operations extremely short not longer than a few months in most cases As a result many developing countries are dependent on U S dollars for long term credit This is what makes capital flows however necessary dangerous in a developing country both locals and foreigners will sell off the local currency en masse at the earliest whiff of devaluation since devaluation makes it more difficult for the country to pay its foreign debts hence the dangerous instability of today s international financial system Although OCA theory accounts for none of these problems they are grave obstacles to development in the context of advancing globalization Monetary nationalism in developing countries operates against the grain of the process and thus makes future financial problems even more likely MONEY IN CRISIS Why has the problem of serial currency crises become so severe in recent decades It is only since 1971 when President Richard Nixon formally untethered the dollar from gold that monies flowing around the globe have ceased to be claims on anything real All the world s currencies are now pure manifestations of sovereignty conjured by governments And the vast majority of such monies are unwanted people are unwilling to hold them as wealth something that will buy in the future at least what it did in the past Governments can force their citizens to hold national money by requiring its use in transactions with the state but foreigners who are not thus compelled will choose not to do so And in a world in which people will only willingly hold dollars and a handful of other currencies in lieu of gold money the mythology tying money to sovereignty is a costly and sometimes dangerous one Monetary nationalism is simply incompatible with globalization It has always been even if this has only become apparent since the 1970s when all the world s governments rendered their currencies intrinsically worthless Yet perversely as a matter of both monetary logic and history the most notable economist critical of globalization Stiglitz has argued passionately for monetary nationalism as the remedy for the economic chaos caused by currency crises When millions of people locals and foreigners are selling a national currency for fear of an impending default the Stiglitz solution is for the issuing government to simply decouple from the world drop interest rates devalue close off financial flows and stiff the lenders It is precisely this thinking a throwback to the isolationism of the 1930s that is at the root of the cycle of crisis that has infected modern globalization Argentina has become the poster child for monetary nationalists those who believe that every country should have its own paper currency and not waste resources hoarding gold or hard currency reserves Monetary nationalists advocate capital controls to avoid entanglement with foreign creditors But they cannot stop there As Hayek emphasized in his 1937 lecture exchange control designed to prevent effectively the outflow of capital would really have to involve a complete control of foreign trade since capital movements are triggered by changes in the terms of credit on exports and imports Indeed this is precisely the path that Argentina has followed since 2002 when the government abandoned its currency board which tried to fix the peso to the dollar without the dollars necessary to do so Since writing off 80 billion worth of its debts 75 percent in nominal terms the Argentine government has been resorting to ever more intrusive means in order to prevent its citizens from protecting what remains of their savings and buying from or selling to foreigners The country has gone straight back to the statist model of economic control that has failed Latin America repeatedly over generations The government has steadily piled on more and more onerous capital and domestic price controls export taxes export bans and limits on citizens access to foreign currency Annual inflation has nevertheless risen to about 20 percent prompting the government to make ham fisted efforts to manipulate the official price data The economy has become ominously dependent on soybean production which surged in the wake of price controls and export bans on cattle taking the country back to the pre globalization model of reliance on a single commodity export for hard currency earnings Despite many years of robust postcrisis economic recovery GDP is still in constant U S dollars 26 percent below its peak in 1998 and the country s long term economic future looks as fragile as ever When currency crises hit countries need dollars to pay off creditors That is when their governments turn to the IMF the most demonized institutional face of globalization The IMF has been attacked by Stiglitz and others for violating sovereign rights in imposing conditions in return for loans Yet the sort of compromises on policy autonomy that sovereign borrowers strike today with the IMF were in the past struck directly with foreign governments And in the nineteenth century these compromises cut far more deeply into national autonomy Historically throughout the Balkans and Latin America sovereign borrowers subjected themselves to considerable foreign control at times enduring what were considered to be egregious blows to independence Following its recognition as a state in 1832 Greece spent the rest of the century under varying degrees of foreign creditor control on the heels of a default on its 1832 obligations the country had its entire finances placed under French administration In order to return to the international markets after 1878 the country had to precommit specific revenues from customs and state monopolies to debt repayment An 1887 loan gave its creditors the power to create a company that would supervise the revenues committed to repayment After a disastrous war with Turkey over Crete in 1897 Greece was obliged to accept a control commission comprised entirely of representatives of the major powers that had absolute power over the sources of revenue necessary to fund its war debt Greece s experience was mirrored in Bulgaria Serbia the Ottoman Empire Egypt and of course Argentina There is in short no age of monetary sovereignty to return to Countries have always borrowed and when offered the choice between paying high interest rates to compensate for default risk which was typical during the Renaissance and paying lower interest rates in return for sacrificing some autonomy over their ability to default which was typical in the nineteenth century they have commonly chosen the latter As for the notion that the IMF today possesses some extraordinary power over the exchange rate policies of borrowing countries this too is historically inaccurate Adherence to the nineteenth century gold standard with the Bank of England at the helm of the system severely restricted national monetary autonomy yet governments voluntarily subjected themselves to it precisely because it meant cheaper capital and greater trade opportunities THE MIGHTY DOLLAR For a large diversified economy like that of the United States fluctuating exchange rates are the economic equivalent of a minor toothache They require fillings from time to time in the form of corporate financial hedging and active global supply management but never any major surgery There are two reasons for this First much of what Americans buy from abroad can when import prices rise quickly and cheaply be replaced by domestic production and much of what they sell abroad can when export prices fall be diverted to the domestic market Second foreigners are happy to hold U S dollars as wealth This is not so for smaller and less advanced economies They depend on imports for growth and often for sheer survival yet cannot pay for them without dollars What can they do Reclaim the sovereignty they have allegedly lost to the IMF and international markets by replacing the unwanted national currency with dollars as Ecuador and El Salvador did half a decade ago or euros as Bosnia Kosovo and Montenegro did and thereby end currency crises for good Ecuador is the shining example of the benefits of dollarization a country in constant political turmoil has been a bastion of economic stability with steady robust economic growth and the lowest inflation rate in Latin America No wonder its new leftist president Rafael Correa was obliged to ditch his de dollarization campaign in order to win over the electorate Contrast Ecuador with the Dominican Republic which suffered a devastating currency crisis in 2004 a needless crisis as 85 percent of its trade is conducted with the United States a figure comparable to the percentage of a typical U S state s trade with other U S states It is often argued that dollarization is only feasible for small countries No doubt smallness makes for a simpler transition But even Brazil s economy is less than half the size of California s and the U S Federal Reserve could accommodate the increased demand for dollars painlessly and profitably without in any way sacrificing its commitment to U S domestic price stability An enlightened U S government would actually make it politically easier and less costly for more countries to adopt the dollar by rebating the seigniorage profits it earns when people hold more dollars To get dollars dollarizing countries give the Federal Reserve interest bearing assets such as Treasury bonds which the United States would otherwise have to pay interest on The International Monetary Stability Act of 2000 would have made such rebates official U S policy but the legislation died in Congress unsupported by a Clinton administration that feared it would look like a new foreign aid program Polanyi was wrong when he claimed that because people would never accept foreign fiat money fiat money could never support foreign trade The dollar has emerged as just such a global money This phenomenon was actually foreseen by the brilliant German philosopher and sociologist Georg Simmel in 1900 He surmised Expanding economic relations eventually produce in the enlarged and finally international circle the same features that originally characterized only closed groups economic and legal conditions overcome the spatial separation more and more and they come to operate just as reliably precisely and predictably over a great distance as they did previously in local communities To the extent that this happens the pledge that is the intrinsic value of the money can be reduced Even though we are still far from having a close and reliable relationship within or between nations the trend is undoubtedly in that direction But the dollar s privileged status as today s global money is not heaven bestowed The dollar is ultimately just another money supported only by faith that others will willingly accept it in the future in return for the same sort of valuable things it bought in the past This puts a great burden on the institutions of the U S government to validate that faith And those institutions unfortunately are failing to shoulder that burden Reckless U S fiscal policy is undermining the dollar s position even as the currency s role as a global money is expanding Four decades ago the renowned French economist Jacques Rueff writing just a few years before the collapse of the Bretton Woods dollar based gold exchange standard argued that the system attains such a degree of absurdity that no human brain having the power to reason can defend it The precariousness of the dollar s position today is similar The United States can run a chronic balance of payments deficit and never feel the effects Dollars sent abroad immediately come home in the form of loans as dollars are of no use abroad If I had an agreement with my tailor that whatever money I pay him he returns to me the very same day as a loan Rueff explained by way of analogy I would have no objection at all to ordering more suits from him With the U S current account deficit running at an enormous 6 6 percent of GDP about 2 billion a day must be imported to sustain it the United States is in the fortunate position of the suit buyer with a Chinese tailor who instantaneously returns his payments in the form of loans generally in the U S case as purchases of U S Treasury bonds The current account deficit is partially fueled by the budget deficit a dollar more of the latter yields about 20 50 cents more of the former which will soar in the next decade in the absence of reforms to curtail federal entitlement spending on medical care and retirement benefits for a longer living population The United States and indeed its Chinese tailor must therefore be concerned with the sustainability of what Rueff called an absurdity In the absence of long term fiscal prudence the United States risks undermining the faith foreigners have placed in its management of the dollar that is their belief that the U S government can continue to sustain low inflation without having to resort to growth crushing interest rate hikes as a means of ensuring continued high capital inflows PRIVATIZING MONEY It is widely assumed that the natural alternative to the dollar as a global currency is the

    Original URL path: http://www.911omissionreport.com/end_of_national_currency.html (2016-02-14)
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  • Globalization makes national currencies obsolete
    a world in which people will only willingly hold U S dollars and a handful of other currencies in lieu of gold money the mythology tying money to sovereignty is a costly and sometimes dangerous one Monetary nationalism is simply incompatible with globalization For a large diversified economy like that of the United States fluctuating exchange rates are the economic equivalent of a minor toothache They require fillings from time to time in the form of corporate financial hedging and active global supply management but never any major surgery There are two reasons for this First much of what Americans buy from abroad can when import prices rise quickly and cheaply be replaced by domestic production and much of what they sell abroad can when export prices fall be diverted to the domestic market Second foreigners are happy to hold U S dollars as wealth But the U S dollar s privileged status as today s global money is not heaven bestowed The dollar is ultimately just another money supported only by faith that others will willingly accept it in the future in return for the same sort of valuable things it bought in the past This puts a great burden on the institutions of the U S government to validate that faith And those institutions unfortunately are failing to shoulder that burden Reckless U S fiscal policy is undermining the dollar s position even as the currency s role as a global money is expanding The U S current account deficit is running at an enormous 6 6 of GDP about US 2 billion a day must be imported to sustain it The current account deficit is partially fuelled by the budget deficit which will soar in the next decade in the absence of reforms to curtail federal entitlement spending on medical care and retirement benefits for a longer living population In the absence of long term fiscal prudence the United States risks undermining the faith foreigners have placed in its management of the dollar that is their belief that the U S government can continue to sustain low inflation without having to resort to growth crushing interest rate hikes as a means of ensuring continued high capital inflows It is widely assumed that the natural alternative to the dollar as a global currency is the euro Faith in the euro s endurance however is still fragile undermined by the same fiscal concerns that afflict the dollar but with the added angst stemming from concerns about the temptations faced by Italy and others to return to monetary nationalism But there is another alternative the world s most enduring form of money gold It must be stressed that a well managed fiat money system has considerable advantages over a commodity based one not least of which that it does not waste valuable resources There is little to commend in digging up gold in South Africa just to bury it again in Fort Knox The question is how long such a

    Original URL path: http://www.911omissionreport.com/currencies_obsolete.html (2016-02-14)
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  • The G20 moves the world a step closer to a global currency
    state to ask for help It has secured a precautionary credit line of 47bn Gordon Brown said it took 15 years for the world to grasp the nettle after Great Crash in 1929 This time I think people will agree that it has been different he said President Barack Obama was less dramatic I think we did OK he said Bretton Woods in 1944 was a simpler affair Just Roosevelt and Churchill sitting in a room with a brandy that s an easy negotiation but that s not the world we live in There will be 250bn in trade finance to kick start shipping after lenders cut back on Letters of Credit after September s heart attack in the banking system Global trade volumes fell at annual rate of 41pc from November to January according to Holland s CPB institute the steepest peacetime fall on record Euphoria swept emerging markets yesterday as the first reports of the IMF boost circulated Investors now know that countries like Mexico can arrange a credit facility able to cope with major shocks and do so on supportive terms rather than the hair shirt deflation policies of the old IMF Fear is receding again The Russians had hoped their idea to develop SDRs as a full reserve currency to challenge the dollar would make its way on to the agenda but at least they got a foot in the door There is now a world currency in waiting In time SDRs are likely evolve into a parking place for the foreign holdings of central banks led by the People s Bank of China Beijing s moves this week to offer 95bn in yuan currency swaps to developing economies show how fast China aims to break dollar dependence French President Nicolas Sarkozy said the summit had

    Original URL path: http://www.911omissionreport.com/global_currency.html (2016-02-14)
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  • IMF blueprint for a global currency – yes really
    for all its costs has not jeopardized international monetary stability and the IMS is not on the verge of collapse That said the current system has serious imperfections that feed and facilitate policies of reserves accumulation and reserves creation that are ultimately unsustainable and until they are reversed expose the system to risks and shocks that a reformed system could minimize All in all the IMF believes there has simply been too much reserve hoarding going on Reserve accumulation has accelerated dramatically in the past decade particularly since the 2003 4 At the end of 2009 reserves had risen to 13 percent of global GDP doubling from their 2000 level and over 50 percent of total imports of goods and services Emerging market holdings rose to 32 percent of their GDP 26 percent excluding China Twenty seven of the top 40 reserve holders accounting for over 90 percent of total reserve holdings recorded doubledigit average growth in reserves over 1999 2008 Holdings have also become increasingly concentrated with over half the total held by only five countries These numbers exclude substantial foreign assets of the official sector not recorded as reserves including in sovereign wealth funds SWFs and yet invested in liquid dollar denominated financial instruments that have grown even more in recent years 1 Of course in the first instance the solution probably lies in closer collaboration between sovereigns most likely via the more active use of such things as special drawing rights says the IMF But in the end a global currency makes the most sense the paper concludes especially since the SDR is currently just an accounting tool that draws on the freely usable currencies of member states not an actual currency itself As they summarise 48 From SDR to bancor A limitation of the SDR as

    Original URL path: http://www.911omissionreport.com/imf_global_currency.html (2016-02-14)
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  • Conference promotes global citizenship
    as a bad thing at this time in history globalization is here to stay and we must learn to live with it McGough told instructors Thursday during the 12th annual UWSP Teaching Conference Teaching with a Global Perspective Preparing Students to be Global Citizens Globalization affects everyone even the World Bank which now outsources a majority of its accounting work to New Delhi McGough said Countries such as India and China are destined to be superpowers or at least major players McGough said Drawing on the need for sustainability economic development and self sufficiency McGough offered a strong case for educating college students in the ways of the world Over time you ll find more college graduates going overseas for work These other countries are going to be major sources of employment McGough said Organized by the Office of Academic Affairs the one day conference featured workshops on cross cultural teaching and learning internationalizing the curriculum developing interdisciplinary approaches to global education incorporating non Western themes in the classroom and developing global citizenship through local service learning activities Faculty have left this conference in the past and rewritten their entire syllabi said David Ozsvath a geology professor Maureen Giblin of

    Original URL path: http://www.911omissionreport.com/global_citizenship.html (2016-02-14)
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  • Cash to become extinct as chips take off
    watches or other portable devices Australian Central chief executive Peter Evers believes cash will be replaced for most transactions in five to seven years Cash will disappear as there will be other forms of carrying cash stored value in your phone or whatever it might be It will transfer automatically he said We re very close in countries around the world If you go in to Hong Kong or Singapore the low value transactions have already disappeared You can t go anywhere like on public transport without pre purchasing a card I think the Australian Payment Systems Board is very much on top of it and is trying to move down a path but hasn t publicly put things into place yet BankSA general manager strategy and operations Chris Ward expects Australia to follow the offshore lead with small cash transactions disappearing first So you can t go and buy a bottle of water from the deli with cash you ve got to go and buy it with your chip he said Bendigo and Adelaide Bank state manager SA NT John Oliver said it was easier for retailers to use electronic transactions than manual cash transactions Savings Loans chief executive

    Original URL path: http://www.911omissionreport.com/cash_extinct.html (2016-02-14)
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