G20 Votes to Fund Global Currency

The G20 summit meeting in London last week, through the International Monetary Fund, took an important step to create a new global currency to replace the dollar as the world's foreign exchange reserve currency of choice.

Appearing on Sean Hannity's Fox News Channel television show, political consultant Dick Morris and Hannity agreed the decision by the G20 proved the "conspiracy theorists were right" ("This video has been removed due to terms of use violation", according to YouTube. Uh-huh, right) and there is now clear evidence of a plan to create a one-world currency.

Point 19 of the final communiqué from the G20 summit in London April 2 specified, "We have agreed to support a general SDR which will inject $250 billion into the world economy and increase global liquidity," taking the first steps forward to implement China's proposal that Special Drawing Rights at the IMF should be created as a foreign exchange currency to replace the dollar.

"I think the dollar is now under question," billionaire investor and political activist George Soros told CNBC, commenting that the goal was to create an IMF currency to use in international trade.
Obama deficits frighten China

China is clearly worried its massive holdings of U.S. dollars are at risk of devaluation, with the Obama administration projecting trillion-dollar deficits into the foreseeable future.
At the beginning of this year, China's holdings of U.S. Treasury securities jumped to $739 billion, up dramatically from $535 billion in June 2008.

On March 17, the Moscow Times published an article revealing the Kremlin attended to use the April G20 meeting in London to push for the IMF to utilize SDRs as "a super-reserve currency widely accepted by the whole of the international community."

Then, a few days later, on March 24, the Financial Times in London reported China's central bank governor Zhou Xiaochuan has proposed to utilize SDRs issued by the IMF as a world reserve currency.

The coincidence of the two announcements gave the impression Moscow and Beijing had coordinated their efforts to undermine the dollar.

The G20 final communiqué gave the strong impression the meeting adopted China's proposal.

China's proposal called for the IMF to issue at least $250 billion in SDRs to IMF-member states as a method of placing a safety net under developing countries that might otherwise have to declare bankruptcy.

International overdraft

As Red Alert previously reported, the proposal originally advanced by China and Russia would issue SDRs to central banks of IMF member states far in excess of any gold or currency reserves the member states have on deposit with the IMF.

The idea is to utilize the little-understood and largely ignored SDR's in a new capacity, as a sort of an international overdraft facility made available to bankrupt or financially failing IMF members originated with Ted Turner, formerly a senior official at both the Federal Reserve and the U.S. Treasury.

The IMF created SDRs in 1969 to support the Bretton Woods fixed–exchange-rate system.

"The international supply of two key reserve assets – gold and the U.S. dollar – proved inadequate for supporting the expansion of world trade and financial development that was taking place," a a document on the IMF website explains. "Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF."

When the Bretton Woods fixed-rate system collapse, major world currencies, including the dollar, shifted to a floating exchange rate system where the price of the dollar and other major world currencies was created by trading on international currency exchanges.

Until the current global economic crisis, SDRs issued by the IMF have been used by IMF members primarily as a reserve account to support international trade transactions, not as an alternative international currency available to settle international debt transactions in danger of default.



Jerome R. Corsi is a staff reporter for WND. He received a Ph.D. from Harvard University in political science in 1972 and has written many books and articles, including his best-sellers "The Obama Nation" and "The Late Great USA." Other books include "Showdown with Nuclear Iran," "Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil," which he co-authored with WND columnist Craig. R. Smith, and "Atomic Iran."