Harvey@Before It's News: Before It's News Featured News

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THIS ARTICLE IS VERY CLEAR AND SIMPLE TO UNDERSTAND.

IN SHORT: IT'S OVER!

THE INFRASTRUCTURE IS BEING BUILT FOR THE NEW WORLD… A WORLD WITHOUT ANY NEED FOR THE UNITED STATES!

I have been screaming from the rooftops for two years about the end of the U.S. Dollar as the World Reserve Currency, and the impact that will have on the U.S. economy, but no matter how much myself and others try to warn people, most of what we say falls on deaf ears.

This generation of Americans has no concept of what losing that status will mean to our way of life. That’s because they’ve never known life here in the U.S. as anything other than the Reserve Currency. Being the Reserve Currency has been an ongoing scam on the rest of the world, and the rest of the world has finally caught on. Other countries pay their workers crap wages to make OUR products, and then LEND us the money to buy the products THEY produce. It was only a matter of time before all these other countries figured out they didn’t need to keep funding OUR extravagance at THEIR expense.

OBAMA SPITTING IN THE FACES OF OUR ALLIES HAS NOT HELPED AMERICA!

Being the world Reserve Currency has given America special privileges and ENORMOUS power. Our status has allowed us to borrow money at rates a fraction of our “ALLIES.” With everything being denominated in U.S. Dollars, it gave the United States control in everyone else’s financial affairs. It appears everyone else got tired of it. Furthermore, whenever trouble has struck, America has just started up the printing press. Since taking office, Obama has printed approximately $85 BILLION PER MONTH OUT OF THIN AIR. By joining China’s new bank discussed below, our “ALLIES,” and the rest of the world, have sent a CLEAR message to America:

YOU ARE BROKE, AND YOU ARE OBSOLETE!

As the author below states, “The blows to America’s economic might are descending rapidly and forcibly. Brace yourself: A new economic age is about to begin.” The infrastructure is being built for a world without the United States. China’s new long-awaited international payment system could go live as early as September or October. The new payment system will allow nations and companies to conduct transactions outside America’s control. Furthermore, America’s financial house will be in such disarray, some have said WITHIN ONE YEAR OF THE ECONOMIC CRASH, 9 OUT OF 10 AMERICANS WILL BE DEAD.

A NEW DAY IN AMERICA IS ALMOST HERE…

BRACE YOURSELVES…

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THE WORLD IS ENTERING A NEW ECONOMIC ERA - ONE THAT WON’T BE DEFINED BY AMERICA!

This past March marked a radical turning point for the global economy, particularly the United States’ economic dominance.

China proposed the launch of the Asian Infrastructure Investment Bank (aiib)—a new, Chinese-run international bank specifically designed to challenge U.S. global economic leadership. America tried to convince other nations not to agree to join. But it failed—even with its closest allies.

FOR THE U.S., IT WAS AN UNMITIGATED DISASTER!

It should be a “wake-up call,” to a “new economic era,” wrote former Treasury Secretary Larry Summers.

The world essentially closed ranks and turned its back on America.

“The battle of wills between Beijing and Washington over a China-sponsored development bank for Asia is turning into a rout,” wrote the Washington Times. “[T]he Obama administration has found itself isolated and embarrassed as its top allies lined up this week to join the proposed Asian Infrastructure Investment Bank” (March 18).

And sadly, it was America’s most important ally that led the defection.

The World Turns

The story begins with a 2013 speech by newly crowned Chinese leader Xi Jinping. He outlined the creation of a new international investment bank where nations could pool money to invest in the developing world. China would provide $50 billion in seed money and retain up to 50 percent ownership.

This was not a simple public relations effort aimed at helping China’s Asian neighbors. In fact, Xi Jinping was up front about the bank’s purpose: It would compete with the U.S.-dominated World Bank and Asian Development Bank. The New York Times later called it a “direct threat” to the post-World War ii financial system dominated by the U.S.

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But few in Washington paid it much heed—at first. Policymakers refused to believe that America’s allies would even consider joining such an obviously anti-American effort.

Then, last year, a strange thing happened. Australia announced it would join China to become a founding member of the bank.

America was shocked. Australia is one of America’s closest allies.

The move flabbergasted the State Department. President Barack Obama made a personal call to Australian Prime Minister Tony Abbot to voice his concern. American lobbyists went door to door to make sure other nations understood America’s opposition.

The message was clear: Don’t join China’s bank!

Australia recanted—and it appeared the crisis was averted.

Then the United Kingdom dropped an economic bomb.

In a move that the Financial Times said shocked even the Chinese, British Chancellor of the Exchequer George Osborne said his nation would apply to join the aiib as a founding member.

The announcement caught Washington completely off guard. It was clear Washington had not been notified. A White House spokesman mumbled something about the United Kingdom being a sovereign nation and as such was free to make its own decisions.

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Then the dam burst. Five days later, Germany, France and Italy said they too would join China’s bank. They represent the world’s fourth-, sixth- and eighth-largest economies. Norway, Sweden, Finland, the Netherlands and Denmark filed for membership as well.

Even South Korea and Taiwan—two nations very dependent on America for geopolitical and military support—said they would join China’s bank.

Australia recanted its recantation and said it would join the aiib after all.

The saga “is turning into a diplomatic debacle for the U.S.,” wrote Financial Times columnist Gideon Rachman. “By setting up and then losing a power struggle with China, Washington has sent an unintended signal about the drift of power and influence in the 21st century” (March 16).

WHY HAS THE WORLD SO DRAMATICALLY SPURNED AMERICA?

According to the Australian, President Obama turned the World Bank into a tool to push his climate-change agenda. The bank was curtailing loans to developing nations to build coal-fired power plants and pushing them to buy more expensive types of power generation they could not afford. Into the resulting climate of resentment stepped China.

According to this narrative, Europe and the rest of the world just rushed through the gates to get a piece of the $50 billion pie, which has since increased to $100 billion, and which, due to the power of fractional reserve lending, will ultimately equate to more than $1 trillion worth of activity. China says it envisions $6 trillion worth of projects over the next few years.

But the World Bank has always been a political tool. Europe’s and America’s other allies have resisted joining Chinese initiatives before.

So what happened?

The Writing Was on the Wall

It has become impossible to ignore China’s rise. In 2010, China overtook the U.S. to become the world’s biggest energy consumer. It doubled its energy usage in just 10 years. And in the past, being the world’s biggest consumer of fossil fuels was synonymous with being its dominant economy. Now it is the world’s largest energy producer too. That same year, China passed America to become the world’s largest market for motor vehicles. Last year it became the world’s largest importer of agricultural products. It consumed more cement in the past three years than America did in the entire 20th century. From its insatiable appetite for iron and copper to its unrivaled imports of gold bullion, China consumes more resources than anyone else. And no wonder: China produces 54 percent of the world’s textiles. It produces 95 percent of the world’s rare earth elements. Twenty-six nuclear power plants are under construction—almost half as many as currently exist in the U.S. The list goes on.

But here is what the world is finally recognizing. On a per-capita basis, Chinese consumption is still just a fraction of the typical American’s or European’s. China is going to get bigger and more powerful. A lot bigger. A lot more powerful.

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In October, the International Monetary Fund released the latest numbers for global gross domestic products. It estimated that when you adjust the national economic output to account for purchasing power within each nation, China produced $17.6 trillion worth of “real” goods and services—compared to America’s $17.4 trillion.

For the first time since World War i, America was arguably not the leading economic power on the planet.

The world has changed—and almost nobody in America noticed.

But outside America, nations are scrambling to catch a ride on the rising Chinese juggernaut. Or at least get out of the way.

Payback

Yet for Britain there may have been an additional motive.

Starting from practically his first day in office, President Obama sought to diminish America’s relationship with Britain. There are many examples: Sending the Churchill bust home; calling the Falklands the Malvinas; dismissing with royal protocol.

When then Prime Minister Gordon Brown came to America to show support for its new president, he was treated like a leader of an inconsequential banana republic.

British papers considered it a national humiliation and embarrassment. The Daily Telegraph boiled: “We get the point. … We’re just one of many allies and you want fancy new friends. Well, the next time you need something doing, something which impinges on your national security, then try calling the French, or the Japanese, or best of all the Germans” (March 4, 2009; emphasis added throughout).

Well, “next time” arrived.

But while the pushback from Britain might have been personal, it was strictly business for most of America’s other allies.

Alternative System

The United States dominates the global financial system. And the dollar is the world’s reserve currency.

Whether you are trading oil, purchasing a boatload of wheat, financing the construction of a mine in Burkina Faso, or buying an Airbus 380, you most likely need dollars—and you need to use the U.S. interbank payment system (swift).

Geopolitically, the dollar’s dominance means it can force nations to comply with its will, or as countries like Iran and North Korea have experienced, revert back to bartering to buy and sell products internationally.

Yet great power, particularly the real or perceived abuse of great power, leads to insurrection.

In June 2014, the U.S. Justice Department fined French bank bnp Paribas $8.9 billion for using dollars to facilitate trade with Cuba and Iran, even though the bank was not breaking any French law. America didn’t like that it was helping these nations, so the bank was forced to pay up or be locked out of the U.S. money system—a financial death sentence.

The bank paid. As did Britain’s Standard Chartered Bank, Germany’s Commerzbank and Switzerland’s ubs, among others.

Arnaud Montebourg, France’s finance minister, told the Financial Times that the U.S. policy is “economic warfare.”

You might agree that it was appropriate for America to target foreign banks doing business in countries America is sanctioning. It is ironic that America is now eliminating sanctions on Iran and Cuba, just months after collecting record fines and pushing foreign banks to leave Cuba. But the undeniable result of this and similar actions is a world looking for a new system that avoids the dollar—and U.S. control.

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“[A]fter years of endless wars, spying, debt, money printing, bailouts and insane regulations, the rest of the world has had enough,” writes the popular Sovereign Man economic blog. “And they’re looking for an alternative” (March 13).

Enter China.

The global embrace of the aiib is a massive coup for China. It is a huge step toward making the yuan a reserve currency that could potentially compete with the dollar.

A week after the British announced they would join the aiib, the Chinese state-run Xinhua news agency jubilantly opined: “Welcome Germany! Welcome France! Welcome Italy!” You can envision the grins.

America wasn’t smiling though. Pushback hurts.

According to Summers, China’s introduction of the aiib is the most important financial event since the United States led the world off the gold standard in 1971.

“This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system,” he wrote. “True, there have been any number of periods of frustration for the U.S. before … such as the 1971 Nixon shock, ending the convertibility of the dollar into gold. But I can think of no event since Bretton Woods comparable to the combination of China’s effort to establish a major new institution and the failure of the U.S. to persuade dozens of its traditional allies, starting with Britain, to stay out of it” (April 5).

The global embrace of China’s aiib has been a major embarrassment to America. It dramatically highlights the loss of U.S. power, prestige and political pull

But in terms of immediate threats to America’s ability to project its economic power, a bigger blow is just months away.

The Swift Road to Destruction

China is on the cusp of launching its long-awaited international payment system. Chinese officials say it could go live in September or October. The system will allow foreign banks to conduct transactions in yuan instead of dollars and transfer funds across international borders without using America’s swift payment system.

If successful, the newly created China International Payment System (cips) will remove the biggest hurdles to internationalizing the yuan. It will cut costs, reduce processing times, and simplify the transactions associated with obtaining and using yuan. Reportedly, 13 Chinese banks and seven foreign banks are now testing the system.

Purchasing international goods in yuan will soon be as simple and inexpensive as using the dollar. Reuters compared the creation of cips to a “worldwide payments superhighway” for the yuan.

More importantly for some nations, the new payment system will allow nations and companies to conduct transactions outside America’s control.

When Russia invaded Ukraine and took over Crimea, some U.S. politicians and analysts argued that America should ban Russia from the swift system. They said it would cripple Russia’s economy.

Russia retorted that if it was kicked out, it would launch its own payment system.

America did not make good on its threat. But in just a few months, Russia may be able to use China’s alternative system anyway.

The swift system—America’s most powerful financial weapon—may become obsolete. Not immediately. But soon.

Already, the yuan is one of the world’s top five payment currencies. In November, it surpassed the Canadian and Australian dollars in global usage, according to swift.

It’s true that global yuan usage is still a fraction of the dollar’s, but China’s move to create its own competitive version of America’s swift system is a huge piece of infrastructure going into place to allow the yuan to grab global market share from the dollar.

And that could mean that life in America may be about to radically change.

A New World

Reserve currency status is golden. It gives America special privileges and enormous power. It lets Americans borrow money at lower rates than their Asian and European counterparts. It subsidizes their standard of living. It allows politicians to hand out generous social welfare packages, and it gives American corporations an important leg up on their foreign competitors.

When economic trouble strikes, America is able to crank up the printing presses and flood the economy with dollars—and the world has little choice but to keep accepting them and using them. This lets America boost its economy without experiencing many of the negative consequences normally associated with “quantitative easing.” The rest of the world bears the burden.

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This has been called America’s “exorbitant privilege.” Or as U.S. Treasury Secretary John Bowden Connally Jr. famously told a group of European finance ministers, the dollar “is our currency, but it’s your problem.”

But the world is finally taking action to fix this problem.

As well-known investor Jim Rogers said in January in a video posted on his personal website, the dollar is a “terribly flawed currency .… People are looking for alternatives.” He explained: “The U.S. is the largest debtor nation in the history of the world. Never has a nation ever got into this much debt, and it’s getting higher and higher every day.

“Washington is spending and borrowing even more and not doing anything about it. No nation would be able to get out of this without a crisis. …

“What will need to happen for the U.S. dollar to lose reserve status? More of what is already happening .…

“Even our friends are starting to say it is out of control. The [South] Koreans do not have too much choice but are saying it is not going to work. … The Chinese and the Russians … are looking for something to use besides the U.S. dollar in their trades and in their reserves.”

Now, China is openly challenging America. And many of America’s closest allies—Britain, Germany, Italy, Australia, New Zealand, France, Taiwan—are voting their approval.

The infrastructure is being built for a world without the United States.

It is a sign that although the U.S. dollar may appear strong right now, its long-term fundamentals are swiftly eroding. And with it, American power and prosperity.

Biblical prophecy is explicit in forecasting America’s decline. Beyond that, it foretells exactly which power will replace the U.S. as the world’s preeminent economy—and includes a chilling description of the frenzy of participation it will arouse from greedy and unprincipled investors and merchants all over the planet. It is truly a horrifying picture of the post-American world.

The groundwork for that world is being laid today. The blows to America’s economic might are descending rapidly and forcibly. Brace yourself: A new economic age is about to begin. ▪

Read the article at The Trumpet here:

By: Voice of Reason

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