Tuesday, November 11, 2014

Finance Experts Call for a "New Global Financial Order" at Beijing Conference

In the previous two posts we noted that the recent US election results will probably mean the 2010 IMF reforms will remain stalled and that this will mean China (and the other BRICS) will move forward with plans to challenge the US dollar as sole global reserve currency.

This article in Examiner shows that this change will move forward globally with or without the approval of the US Congress. Some quotes and then a comment. As always, readers should read the entire article linked above for full context.

"On Nov. 5, top financial experts concluded a conference held in Beijing, China to discuss economic reforms and how the current global financial system could be adapted or changed to function in a rapidly evolving monetary environment. Members of a Chinese think tank, along with the former President of the European Central Bank, Jean-Claude Trichet, and former Prime Minister of Australia, Kevin Rudd were all in attendance at the event, and agreed that the current system of international finance was quickly becoming outdated in its ability to deal with events emerging in a new global paradigm."

"At the heart of the discussion was the growing power of the Yuan and China's influence in the global economy, and how the first or second (dependent upon which metric one uses) largest economy in the world can and is shaping monetary policy after decades of U.S. and dollar hegemony over trade, energy, and economic expansion."

"Interestingly, China, along with Russia and other BRICS nations, are already forging ahead with a new global financial system that both parallels and competes with the current system of finance controlled by the West through the dollar and SWIFT systems. In just this year alone, China has opened a new global bank that will accomplish all the functions that the World Bank and IMF do, and Russia has broken through the once impregnable petro-dollar system by allowing oil and natural gas to be bought and sold using either Roubles or Yuan."

"In the new global paradigm of finance, no nation or coalition is an island, and all economies in one form or another are interlocked through an economic system that causes chain reactions across the globe when crises strikes one major power or another. No longer is it just the rest of the world that catches cold when the U.S. sneezes, but now even America feels the financial brunt of when the EU or Japan experiences a monetary calamity."

My added comments: 

This article makes a number of points we have made here on the blog for some time. Here is a bullet point list:

-the global financial community is moving towards major changes in the monetary system over time. What is unknown is how much time will be involved. Expect slow and steady change if there is not another major financial crisis.

-the BRICS led by China will move forward on a Plan B to challenge the US dollar as sole global reserve currency. The process will be a slow and steady (one unless another financial crisis erupts).

-another global financial crisis is possible because we live in a highly interconnected world where, as we like to say, a problem anywhere can become a problem everywhere. In a world where sovereign debt problems exist all over the world and those problems are compounded by unknown derivatives exposure, this can happen very quickly at any time.

All of this is why this blog exists. To monitor events and provide timely information to readers on this important topic. We live in a world where major change is very likely. The unknown is if we get major change very quickly due to a crisis or over time in a more controlled manner. We encourage readers to stay informed and make some level of preparation for the changes likely coming (loss of sole reserve status for the US dollar).

Added note: Koos Jansen writes this article which explores this Beijing conference more in depth and ties it in to research he has done for many years on China's plans.

No comments:

Post a Comment