After the collapse of the Bretton Woods monetary system, it was replaced by the Jamaican Monetary System, which is the petrodollar system. A little about the dollar, its past and future.
The US dollar has been buried many times, but it is still alive. On the eve of the collapse of the Bretton Woods monetary system, the dollar's share in world foreign exchange reserves was approaching 80% (1970 - 77.2%; 1972 - 78.6%). Then, after the transition to the Jamaican monetary system, it gradually declined and in 1995 reached a minimum level of 59.0%. In the wake of financial globalization, the position of the dollar strengthened again (in 1999-2001 its share reached 70-71%), but then there was a new decrease in the share of the dollar in the world's foreign exchange reserves - to below 61% in 2014. Nevertheless, this is more than the 1995 figure.
According to the Bank for International Settlements, in April 2010 the share of the dollar in transactions in the world foreign exchange market was 84.9%, then in April 2013 it increased to 87. For comparison: the share of the euro over the same period fell from 39.1 to 33, 4%. The imbalance between the position of the dollar in world finance and the position of the United States in the world economy is striking. The share of the United States in world GDP today is about 20%. China has already surpassed the United States in terms of GDP (calculated in terms of purchasing power parity), but the share of the yuan in transactions in the world foreign exchange market in April 2013 was only 2.2%. There is no exact data on the share of the yuan in world foreign exchange reserves, but expert estimates show that it is not much higher than 1%.
These imbalances are very reminiscent of the global economic panorama of the late 19th - early 20th centuries. At that time, there was a regrouping of the leaders of the world economy. The United States came out on top in terms of industrial and agricultural production. In some positions, Germany began to advance to the second place. And Great Britain, which throughout most of the 19th century. had the status of a "world workshop", began to roll back to third place in the world. At the same time, the British pound sterling remained the world currency, which served as a reserve and means of international settlements. Here is the structure of world reserves by type of currency on the eve of the First World War, in 1913 (%): pound sterling - 47; French franc - 30; German mark - 16; US dollar - 2; other currencies - 5 (Officer, Lawrence H. Between the Dollar-Sterling Gold Points: Exchange Rates, Parity, and Market Behavior. Cambridge: Cambridge University Press, 1996). As you can see, the share of the US dollar was extremely insignificant. The disproportion between the level of economic development of the United States and the position of the dollar in the global financial system was about the same as today the disproportion between the economic development of China and the position of the yuan.
The world's bankers, betting on the dollar, needed a world war a century ago for the dollar to take its place in the sun. At the end of 1913, the US Congress, under strong pressure from the "moneybags", voted to create the Federal Reserve System, which in 1914 began to issue the dollar as the single US currency, and six months later, World War broke out. The war changed the balance of power between the leading powers and their currencies. In 1928, the distribution of world foreign exchange reserves was as follows (%): pound sterling - 77; US dollar - 21; French franc - 2. (Officer, Lawrence H.). That is, the pound sterling, despite the sharp economic weakening of Great Britain, not only did not weaken its position, but even strengthened further. The US dollar increased its share by an order of magnitude in comparison with 1913 and confidently took the second place. Other competing currencies went out of the way. To finally defeat the British pound, the owners of the Fed had to prepare and conduct another world war, after which the dollar was equated to gold and became, in fact, the only world currency.
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Formally, the position of the dollar in the world is currently very good, but the main shareholders of the Federal Reserve System cannot but be confused by the fact that the imbalance between the US GDP and the position of the dollar is increasing. The dollar is becoming more volatile. If desired, several large countries can coordinate their efforts, pool resources, start dumping dollar reserves and collapse the dollar. However, the strength of the bosses of the Fed is that they have always been able to act proactively. And now there are many signs that they are taking practical steps to protect the dollar and, above all, to prepare for a big war. The "owners of money" (the owners of the Fed's printing press) have several reasons for unleashing such a war.
1. The owners of the printing press need to maintain the demand and the price of their products. The voluntary run for the dollar in Europe ended more than half a century ago. There are no rational economic incentives to buy dollars in the world. After all, the dollar mass coming off the Fed's printing press today is many times greater than everything that is created in the US economy. And the US gold reserves, although the largest in the world (more than 8000 tons), cover only a fraction of a percent of the total mass of the "green". One thing remains: to impose the "commodity" produced by the Federal Reserve on the world by force. The only backing for the dollar today is the US Armed Forces, whose main function is to support the demand for green paper. In the United States, the classic military-industrial complex (MIC) has long been transformed into a military-banking complex (VBC).
After the collapse of the Bretton Woods monetary system, it was replaced by the Jamaican Monetary System, which is a petrodollar system, since the dollar was pegged to black gold in the 1970s (oil began to be traded exclusively for dollars). Oil is still the foundation of the dollar system. Although America today is almost independent of oil imports, it controls the oil-producing countries. The purpose of the control is to prevent the transition in the trade of black gold to currencies other than the dollar. To do this, Washington resorts, if necessary, to military operations in the regions of oil production. First of all, in the Near and Middle East. Muammar Gaddafi was overthrown and brutally killed only because he first switched from dollars to euros in payments for oil, and then planned to switch to the gold dinar.
2. When the US dollar begins to fall, America turns on all the levers to strengthen the weakening dollar (operations to destabilize the political situation in different parts of the world; civil and regional wars). Against this background, America, despite its increasing economic degradation, is turning into an artificial “island of stability”. Capital from different parts of the world is beginning to rush to America, raising the rate of the "green paper". Why does America need a high dollar? The answer is not difficult.
First, the United States gets the opportunity for cheap imports to ensure domestic consumption. The printing press, coupled with an overvalued American currency, is the ideal condition for the existence of a parasite state.
Secondly, with the help of the expensive dollar, America (or rather, the owners of the Fed) gets the opportunity to buy cheap natural resources, enterprises, real estate, and other assets all over the world. The current dollar system will be needed by the bosses of the Fed until the whole world comes under their control.
3. "Masters of money" (the main shareholders of the Fed) may need not only regional, but also global destabilization, that is, a world war. Such destabilization should lead to mutual destruction or at least weakening of all potential competitors of America. Washington (or rather, the Federal Reserve) needs an exclusively monocentric model of the world. This model cannot be built without a big war. A world war will solve many of America's economic problems, which in the near future threaten to become critical for it.
For example, the US national debt at the end of 2013 was already 104.5%. But in Europe, which has been experiencing a debt crisis for several years, this figure is lower. For the countries of the euro area at the end of 2013, it was equal to 92.6%. The problem of external debt is no less acute for Washington. In August 2014, the relative level of this debt reached 107% of GDP. Debt servicing has to be spent more and more of the income. Today, in the US budget expenditures, the interest on public debt is low (about 7%), but interest rates in the American economy as a result of the quantitative easing program (QE) were purely symbolic. The KS program is being phased out, and the cost of servicing government and all other debts will increase sharply. In this situation, the ruling circles of the United States are surely recalling the history of a century ago. On the eve of World War I, America already ranked first in the world in industrial production, but at the same time had a huge external debt (primarily to Great Britain). The First World War radically changed the situation. The US has become the largest net international lender. At the same time, their main war allies - Britain and France - became America's biggest debtors. As a result of World War II, America concentrated 70% of the world's gold reserves (excluding the Soviet Union). This strengthening of the United States made it possible to legalize the position of the dollar as a world currency (decisions of the international conference in Bretton Woods in 1944).
In the event that the United States manages to become the sole beneficiary of the third world war, the problem of its old debts will disappear by itself. Washington will then be able to unilaterally write off the debts of other countries from its balance sheet, arbitrarily determining which countries bear the "blame" for the war. The monetary claims of the "guilty" countries against America are canceled by definition, just like the Entente countries did with respect to Germany at the 1919 Paris Peace Conference. Moreover, America, as a winner, will be able to impose reparations and indemnities on the "guilty". Just as the Entente countries did at the same conference in Paris in 1919.
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The third world war will be fundamentally different from everything that the world has known until now. It will start without an official announcement. And although we are not yet fully aware of this, such a war, most likely, has already begun. With the use of mercenaries (private military companies), relying on the fifth column within individual countries, with the active use of Maidan technologies, the involvement of the media controlled by Washington, the announcement of economic sanctions, etc. This undeclared war is being waged under the banner of fighting terrorism, “radical Islamism,” “Russian aggression,” human rights violations, and so on. etc.
In the course of such an undeclared world war, the "owners of money" (the shareholders of the FRS) will solve the accumulated problems of the dollar. For example, under the banner of combating terrorism and "dirty money", the United States can carry out "monetary reform". Its essence is simple. The FRS issues new dollars and organizes their exchange for the old "green mass". In this case, bearers of old dollars must provide reliable evidence of the legality of their origin. Control filters can be so strict that the lion's share of old dollars will not pass the "exam" and become trash. This will remove the problem of the "dollar overhang" pressing on Uncle Sam. However, this option is not ideal for the United States either - a one-time robbery of the whole world can encourage other countries to use their national currencies in international settlements, create regional currencies, and completely abandon the dollar.
Therefore, in the third undeclared world war, other economic methods can be used. For example, despite the fact that the "green mass" has flooded the whole world, the purchasing power of the dollar in the commodity markets is quite high. There is no threat of hyperinflation in sight. Everything is very simple. The lion's share of all printing press output goes to financial markets. However, there are 101 ways to curtail or even completely liquidate these very financial markets. Then all the "green mass" will pour into the commodity markets. There will be hyperinflation comparable to that experienced by the Weimar Republic in the early 1920s. At best, 1% of the purchasing power of the current dollar will remain. Catastrophe? How to look. Indeed, in this case, holders of trillions of dollars around the world will have one rubbish on their hands. Only China's gold and foreign exchange reserves have already exceeded $ 4 trillion, with green paper accounting for at least 1/3. After that, America carries out monetary reform and introduces a new full-fledged dollar. About five years ago, the problem of the possible implementation of such a "monetary reform" was actively discussed, only in place of the new dollar was then a currency called "amero". It was assumed that it would be the single currency of three countries - the United States, Canada and Mexico. The option of replacing the dollar with "amero" can still be revived, but it will require very serious military support from Washington.
In any case, there is no reason to count on the weakening of instability in the world. This instability is a manifestation of the dollar's weakness and the agony of the Fed's owners. Like a wounded beast, they will fight to the end. If not long ago it was said that Washington is planting "controlled chaos" in the world, now it is already obvious that chaos is becoming uncontrollable. However, the first two world wars did not end as planned by the bankers who started them. Author Valentin Katasonov
