Friday, July 3, 2009

India Questioning U.S. Dollar Dominance…

Three years ago talk about replacing the U.S. dollar as the reserve currency was met with great skepticism. Now India is joining Russia and China in opening talking about the problem of owning too many dollars. It would seem that the holders of dollars don’t particularly like our inability to pay our debts and our purposeful currency devaluation. Who would have figured?

Now the demise of our dollar is picking up momentum. Soon there will be a critical mass reached and when that happens the world’s central bankers, dominated by U.K. and U.S. central banks, will have THE proposal that will undoubtedly place them on the top of a new credit based new and bigger, more highly leveraged, never ending growth Ponzi currency/debt scheme! It’s coming fellow slaves, get ready.

India Joins Russia, China in Questioning U.S. Dollar Dominance

By Mark Deen and Isabelle Mas

July 3 (Bloomberg) -- Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.

“The major part of Indian reserves are in dollars -- that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview today in Aix-en-Provence, France, where he was attending an economic conference.

Singh is preparing to join leaders from the Group of Eight industrialized nations -- the U.S., Japan, Germany, Britain, France, Italy, Canada and Russia -- at a summit in Italy next week which is due to tackle the global economy. China and Brazil will also send representative to the G-8 summit.

As the talks have neared, China and Russia have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.

“There should be a system to maintain the stability of the major reserve currencies,” Former Chinese Vice Premier Zeng Peiyan said in a speech in Beijing today, highlighting the nation’s concerns about a global financial system dominated by the dollar.

Fiscal and current-account deficits must be supervised as “your currency is likely to become my problem,” said Zeng, who is now the head of a research center under the government’s top economic planning agency. The People’s Bank of China said June 26 that the International Monetary Fund should manage more of members’ reserves.

Russian Proposals

Russian President Dmitry Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the dollar’s future as a global reserve currency. Russia’s proposals for the Group of 20 major developed and developing nations summit in London in April included the creation of a supranational currency.

“We will resume” talks on the supranational currency proposal at the G-8 summit in L’Aquila on July 8-10, Medvedev aide Sergei Prikhodko told reporters in Moscow today.

Singh adviser Tendulkar said that big dollar holders face a “prisoner’s dilemma” in terms of managing their holdings. “That’s why I’m telling them to do this,” he said.

He also said that world currencies need to adjust to help unwind trade imbalances that have contributed to the global financial crisis.

“The major imbalances which led to the current situation, the current account surpluses and deficits, have to be addressed,” he said. “Currency adjustment is one thing that suggests itself.”

Emerging-Market Dependence

For all the complaints about the dollar, emerging markets such as India remain dependent on the currency of the U.S., the world’s largest economy and a $2.5 trillion export market. The IMF said June 30 that the share of dollars in global foreign- exchange reserves increased to 65 percent in the first three months of this year, the highest since 2007.

Tendulkar said that the matter needs to be taken up in international talks, and that it emphasizes the need for those talks to go beyond the traditional G-8.

“They can meet if they want to,” he said. “The G-20 has a wider role, has representation of the countries that are likely to lead the recovery process.”

While we can personally withdraw from the debt and market games the world’s central bankers are playing, NO ONE will be able to escape their Ponzi scheme entirely. That’s because they are indebting nations and the percentage of your work efforts STOLEN from your productive efforts will increase dramatically.

Then there are the “events” that follow certain economic events… See Martin Armstrong’s latest for more on that! Oh, you liked spending $3 trillion plus on an Iraq war fought in the name of 9/11 but really all about control and profits for the military industrial complex? Oil you say? Yes, you and I are now indebted for all that money but it will be the Chinese that profit as they are the ones who have inked the deal for Iraqi oil (ht Point):
And the winner of Iraq's oil is...China?
Yes, our currency is getting what it deserves. Actually it deserves far worse as America is bankrupt and has already began to default on her debts – that’s what “Quantitative Easing” is all about!

At some point in the not too distant future Americans are going to have to rise to the challenge of our founding fathers and our Constitution. That is IF we desire true Freedom…

Styx – Suite Madame Blue (America Patriotic):