Council on Foreign Relations Pushes for Three Regional Currencies in the World

James Newcomb
JBS
Tuesday May 22, 2007

Create a global lending institution that weakens the economy of wealthy nations, enslaves Third World countries, and prevents those nations from rising out of their impoverished conditions. Blame that institution for creating a plethora of global financial crises over the past fifty years. Then offer a solution of consolidating all of the economies of the world into three different regions, each of which will use one type of currency.

Were that scenario to be played out in the latest issue of Mad Magazine, it might be good for a laugh or two. But when it is published by the most influential foreign policy journal in the world, it is cause for more than a little concern. Foreign Affairs is considered by many to be the "playbook" that our nation's leaders use in creating foreign policy. It unabashedly promotes the concept of "globalism," which is a softball term used to describe a utopian one world government. Regardless of the political party in power, our government has worked to implement the journal's agenda for many years.

Benn Steil, the CFR's Director of International Economics, argues that the International Monetary Fund's (IMF) practice of "lending" money to poor countries causes them to give up a portion of their sovereignty. The IMF is funded by the wealthy nations of the world, the U.S., Britain and Japan, to name a few.

However, since the dollar is the currency of choice for much of the world, the lion's share of funds in the IMF and World Bank are made up of U.S. dollars. The United States, having the fortunate position of possessing the money that the rest of the world has faith in, will then sell government bonds to foreign governments that have just borrowed from the IMF to offset the deficit spending (such as funding the IMF) that Congress approves. To use an analogy, it is like buying a suit from a tailor and then receiving that same money back the next day in the form of a loan. Because of this process, he rightly calls the dollar an absurdity supported only by blind (or stupid) faith in man's wisdom.

The logical answer from the perspective of a free marketer is for the U.S. to return to the gold standard, which is what gave the dollar a worldwide prominence in the first place. Not according to Steil, who says: "A revived gold standard is out of the question. In the nineteenth century, governments spent less than ten percent of national income in a given year. Today, they routinely spend half or more, and so they would never subordinate spending to the stringent requirements of sustaining a commodity-based monetary system."

There we have it. Since those governments have become more socialist in nature, they must be emancipated from the restraints a hard metal currency would place on them from spending us all into paradise.

What does Steil propose as an alternative solution? He writes: "Since economic development outside the process of globalization is no longer possible, countries should abandon monetary nationalism. Governments should replace national currencies with the dollar or the euro or, in the case of Asia, collaborate to produce a new multinational currency over a comparably large and economically diversified area."

But didn't he just called the dollar an absurdity that is supported only by faith? Why the supposed turnaround? Who will control the dollar in this scenario, the IMF or the United States government? Were Steil and his cohorts honest, they could simply say, "we created the problem, now we're offering the solution ... and the American taxpayers have and will pay for both.”

Most readers of Foreign Affairs believe they are getting the "cream of the crop" when it comes to global developments. What they don't realize is that the problem to which Steil presents this preposterous solution was caused exclusively by members of the CFR. Their members have run the Federal Reserve System for decades. And it was CFR member Harry Dexter White who served as the first Executive Director for the United States at the IMF. British Fabian Socialist John Maynard Keynes was the mastermind behind the conference at Bretton Woods, New Hampshire, where the IMF and World Bank came into existence in 1944.

The stated goal of the two newly created institutions was to lend money to nations who were torn apart by war or other calamities. That is exactly what they did and have done. After CFR member Richard Nixon signed an executive order abolishing the gold standard in America's currency in 1971, it gave the Fed a virtually unlimited supply of money to lend and an unlimited amount of power over the hapless nations who are suckered into borrowing.

Always remember the golden rule: "Whoever has the gold makes the rules." This solution is nothing more than a piecemeal approach to a global economy operated by the United Nations.

History shows that only when an economy uses a commodity, such as gold, to back up its currency, is it ever successful. Americans are not rich; they are incredibly broke and they don't even realize it. It is not the wisdom of men that made America great; it was the application of wisdom gleaned from thousands of years of history that made it prosperous and free.

America's role as the world's policeman and the world's welfare provider has come at a great expense to her citizens. Let's try non-intervention and sound economics and see how that works for a change.