By Greg Hunter’s
The President gave a speech on immigration reform yesterday. One of the most outrageous things the President said, “The southern border is more secure today than at any time in the past 20 years.” Please, Mr. President, Phoenix is the kidnapping capitol of America, second only in the world to Mexico City. Meanwhile, as the President tried to score political points, questions about the viability of the U.S. dollar as the world reserve currency are increasing on the world stage.
The headline on a CNN.com story read yesterday, “Dollar should be replaced as international standard, U.N. report says.” This is not some idle talk from some rogue governments that hate the United States. Even our worst enemies have long held dollars in reserve. Yeah sure, there are plenty of countries that want to see the U.S. fall, but this is mainly about the dollar. Without a doubt it is losing trust in the world. Many countries (for a couple of years now) have been calling for changes in the way the world does business in light of massive U.S. debt and economic weakness. China and Russia are just a few who want to move away from the buck. The CNN story said, “The dollar is an unreliable international currency and should be replaced by a more stable system, the United Nations Department of Economic and Social Affairs said in a report released Tuesday. The use of the dollar for international trade came under increasing scrutiny when the U.S. economy fell into recession. ‘The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency,’ the report said.” (Click here for the entire CNN story.)
The U.N. report is not advocating doing away with the dollar altogether, but sharing the dollar’s reserve currency status with other curencies. The new currency woud actually be a group of currencies that give countries something called “special drawing rights,” or SDR’s. The CNN story went on to explain, “The special drawing rights would be backed by a basket of currencies, which would make them less susceptible to volatility in any one currency. And because the value of a special drawing right is defined by the IMF, changes in the value of any one currency could be adjusted for.”
Let’s read the last few words of this sentence again, shall we? It said, “. . . changes in the value of any one currency could be adjusted for.” This should put fear into any person using or saving U.S. dollars. In this scenario, the value of the dollar would undoubtedly be “adjusted” downward in value. That means everything we import would rise in price–and that is just about everything!
Jim Willie, founder of Golden Jackass.com, thinks the SDR by the IMF will fail. Don’t think that will lead to a reprieve from the devaluation executioner. In a report last week, Willie said, “The Intl Monetary Fund currency, the Special Drawing Rights is the perverted goal for broader global usage as replacement to the U.S. Dollar, in a stay of execution, a delayed trip to the cemetery. My view is that the G-20 has no interest whatsoever in any broader SDR usage, which they see as the same toxic bundled fiat papyrus that cannot float well in the oceans, showing different ink on its flag. The paper currencies are doomed to die together, alone or in a bundle. They are all denominated debt masquerading as money.” (Click here for the complete report from Mr. Willie.)
The distressed dollar is what, I think, the President should be concentrating on, not cultivation a disenfranchised Hispanic vote for the midterm elections coming in November. The U.N. report is not just a sign on the road to devaluation, but a giant flashing billboard signaling the U.S. currency is headed for some very deep trouble.