Tag Archives: One world currency

Sophistry: The Senate Runs Interference for Their Federal Reserve Masters






Who has the power to make the President and the Congress bow and fetch, while showing the utmost deference, and not so much as ask a single question, in a financial emergency, other than to do, without reflection or hesitation: exactly what they’re told to do?  Who has the sole power to print our money, charge us interest for doing so, while carefully managing inflation so as to loot the value out of our currency via inflation much as a storied vampire turns its victim into the undead?  Who has the power to cut deals with the money masters of foreign nations, many of whom are a de facto shadow government, with far more power than the official government?  What institution on Earth has absolutely no oversight while holding the planetary economy in its unregulated, secretive, dictatorial hands? Is it the Church?  Is it God?  No.

It’s the Nefarious Federal Reserve System. 

They run the show and congress and the president do not question them but spring to obey whenever Benjamin Bernanke issues a terse instruction in hushed but sonorous tones.  Gentle Ben is the chairman of the greatest criminal enterprise in history, his words make stocks rise and fall and his veiled threat to crash the economy if the Congress questions the “autonomy” of the Fed causes US Senators to quail in fear.  We the people have no right to question, in any way, the actions of these gangsters; indeed we must not even think we have the right to know their secrets because they rule the world and we are but hapless drones in their enlightened eyes.  No one is permitted to know the goings on of the money changers in the high temple of the Federal Reserve and no mere man may stand in the way of the descendants of the socially Darwinist Robber Barons of old: the worlds Rothschild’s, Rockefellers et. Al.  The machinations of these High Priests of Money can lift a country from squalor to untold heights and it can fell the last real superpower with a few economic bubbles and deft manipulation of interest rates.  The Central Bankers of the world represent the most insidious transnational powerbase imaginable with a true capability to dominate the world’s governments, in Toto, by their mysterious ways and transnational policies. 

One brave soul in the House of Representatives dared ask the Lordly Federal Reserve to cast aside its secrecy and as the House members warmed to the idea of asking this mighty power for a peak at the books: the Senate has quashed the whole idea in a fit of corruption and cowardice. There is no way the current crop of politicians will say “boo” to the real rulers of this country: the Federal Reserve.  No mere government is to know the true secrets of money and even the thought of questioning this criminal consortium of, mostly foreign bankers, who make up the Fed, must not be long tolerated.  Heaven forbid the people should wake up and call these bunko artists to account for their actions throughout history!

Consider this article from World Net Daily:

Senate torpedoes Fed Reserve audit
But House plan already has majority support

Posted: July 06, 2009
8:54 pm Eastern

© 2009 WorldNetDaily

Members of the U.S. Senate today rejected a proposal for an audit of the Federal Reserve, the private institution that virtually controls U.S. interest rates, money supply and other economic influences.

The Senate vote against the plan from Sen. Jim DeMint, R-S.C., was among a series of voice votes on a number of amendments to a spending bill that provides money for Congress’ own budget.

According to Roll Call, Majority Leader Harry Reid, D-Nev., had wanted the spending bill approved last month, but DeMint had resisted having the spending approved by unanimous consent.

The DeMint plan was to add an amendment to the spending bill that would have provided for an audit of the Fed to include information about its funding facilities, market operations and any agreements with foreign banks and governments, DeMint told senators, according to Reuters.

(Story continues below) 

“The Federal Reserve will create and disburse trillions of dollars in response to our current financial crisis,” DeMint said. “Americans across the nation, regardless of their opinion on the bailout, want to know where the money has gone.

“Allowing the Fed to operate our nation’s monetary system in almost complete secrecy leads to abuse, inflation and a lower quality of life,” he said, according to Retuers.

DeMint also has said he supports a bill that now is pending in the U.S. House that would call for such an audit.

WND has reported the plan, sponsored by U.S. Rep. Ron Paul, R-Texas, already has collected co-sponsorship from a majority of the members.

Paul has said shortly after his proposal reached that “crucial benchmark” that the bipartisan support is an indicator of how American is fed up with secrecy.

“I look forward to this issue receiving greater public exposure,” Paul said.

His bill has support from 245 members of the 435-member House already.

Paul long has opposed the power held by the Federal Reserve and its ability to manipulate the nation’s economy. He has launched multiple proposals to get rid of the private banking powerhouse, without significant support.

But in light of the current economic dowturn – the government takeover of the banking industry, the government’s demands for various auto industry bankruptcies, the government’s appointment of a “pay czar” – change apparently is coming.

“To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have,” Paul wrote in a recent Straight Talk commentary. “They have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or accountability.”

He’s even said Congress should “reassert its constitutional authority over monetary policy.”

A companion bill to Paul’s also has been introduced in the Senate and was referred to the Committee on Banking, Housing and Urban Affairs.

The Constitution, Paul said, gives Congress, not the private Federal Reserve, “the authority to coin money and regulate the value of the currency.”

Stunning Fed fraud DVD just $4.95! ‘The Money Masters: How Banks Create the World’s Money’

Paul explained his advocacy for the H.R. 1207 audit in the U.S. House:

“Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar,” the Texas Republican said. “Since 1913 the dollar has lost over 95 percent of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy.

“How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation,” he said.

Paul called oversight of the Fed “long overdue.”

You’ve never needed to understand money like you need to understand it now! “Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free” unravels the deception of the Federal Reserve and presents a crystal clear picture of the financial abyss towards which we are heading.

“Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations,” he continued.

“The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight?”

Paul’s bill would also make the Federal Reserve’s funding facilities, including the Primary Dealer Credit Facility, Term Securities Lending Facility, and Term Asset-Backed Securities Lending Facility subject to congressional oversight.



India Joins the Dollar Bashing Club: Getting Out of the US Dollar a Growing Priority for the World.




It seems to be an unspoken reality, as one country after the other expresses its horror at US monetary and economic policy, that nations are trying to divest themselves of the US Dollar before it collapses entirely.  The dollar is being treated like salt water, as if it can be forever printed to cover our outrageous debt and crazed spending and magically we’ll suffer no consequences.  India has looked at the dollar and concluded that they need much fewer of them and that the world trading markets can’t be based on a US dollar because our national debt and spending policies  are clearly unsustainable and insane.  India is an important emerging economy representing a huge market, and labor force, but they’ve seen the light that the dollar is on its way out.  All the nations concerned about the stability of the dollar and who have made it a priority to get rid of the dollar holdings will, as their number and unease grows, eventually trigger a dollar selling spree that will destroy the dollar as a viable currency.

Now India has joined with Europe, Russia, China and various South American Governments that don’t like us very much to raise their voice in protest for our financial malfeasance and to demand, correctly, that a new reserve currency be established that’s not dependant on a single nation.  More straws on the camel’s back for us; and eventually it will be one straw too many, and the camel will break its back just as our dollar will be destroyed; unless we depart from the crazy government policies that are propelling us toward disaster.

Who’s next to join the public display of unease and announce their intentions to divest from our currency, in hushed tones, lest the market get spooked, before they can extract value from our dime-a-dozen dollars?  Japan?  The Arab and Gulf States?  Will the Saudi’s be far behind as they see everyone else getting out and they’re holding an empty bag and half their oil recourses gone?  So is the fact of India joining the dump-the-dollar choir really a big thing? 

You bet it is.  If many more nations take this course a run on the dollar will be inevitable and we’ll be generations trying to repair the damage, if, in fact, it can be repaired.

Consider this article from Bloomberg:

Russia, India Question Dollar Reliance Before Summit (Update2)


By Mark Deen and Simon Kennedy

July 6 (Bloomberg) — Russia and India said the world economy is too reliant on the U.S. dollar and called for changes in how $6.5 trillion in currency reserves are managed, as Group of Eight leaders prepare to meet this week.

“The dollar system or the system based on the dollar and euro have shown that they are flawed,” Russian President Dmitry Medvedev said in an interview with Corriere della Sera, repeating his proposal for a new international reserve currency.

Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said in a July 3 interview that he is urging his nation to diversify its foreign holdings away from the dollar.

The challenge to the dollar, a linchpin of world finance and trade since 1945, underlines the shift in relative economic power toward emerging markets and away from the developed nations that spawned the global crisis.

French Finance Minister Christine Lagarde, speaking yesterday at a conference in Aix en Provence, France, said that “we must explore better coordination of exchange-rate policy.”

Questions need to be asked about “the balance of currencies and the role of currencies in a world that has changed because of the crisis and the growing role of emerging countries,” she told reporters.

Bank of France Governor Christian Noyer said at the same conference, “We really need to make sure there is a greater stability between the big currencies in the period to come.”

Dollar Share Grows

“People know that it won’t happen overnight, but the dollar will take the brunt of growing calls by such developing countries as China and Russia for a review of the single reserve currency system,” said Akira Takeuchi, a Tokyo-based currency dealer at Chuo Mitsui Trust & Banking Co., a unit of Japan’s seventh-largest banking group.

The dollar traded at $1.3974 per euro as of 10:12 a.m. in Tokyo from $1.3980 in New York on July 3. The U.S. currency declined to 95.72 yen from 96.04 yen. The euro fell to 133.75 yen from 134.26 yen.

For all the concerns about the dollar’s role, emerging markets such as China and India remain dependent on the currency. The International Monetary Fund said June 30 the share of dollars in allocated global foreign-exchange reserves increased to 65 percent, or $2.6 trillion, in the first three months of this year, the highest since 2007.

‘Years to Come’

The creation of a supranational reserve currency has been discussed in academic circles and isn’t the Chinese government’s position, Deputy Foreign Minister He Yafei told reporters in Rome yesterday. China expects the U.S. dollar to maintain its role for “many years to come,” He said.

While Medvedev said he sees “no alternative” to the dollar or euro now, he repeated his proposal that “regional reserve currencies” be developed and again questioned the wisdom of relying on the dollar.

“In the long term, we must also think about a single unit of payment such as the International Monetary Fund’s Special Drawing Rights,” a unit of an account linked to a basket of currencies, he told the Italian newspaper. “We cannot be hostages to the economic situation of a single country, as is happening today with the United States.”

Russia has support. India’s Tendulkar said he is advising Singh to diversify India’s $264.6 billion in foreign-exchange reserves and hold fewer dollars.

‘Prisoner’s Dilemma’

“The major part of Indian reserves are in dollars — that is something that’s a problem for us,” he said in Aix en Provence. He said big dollar holders face a “prisoner’s dilemma,” a reference to a problem in game theory in which a rational choice for an individual has negative consequences for a group.

The People’s Bank of China, that country’s central bank, said June 26 that the IMF should manage more of its members’ reserves. China said July 2 that it will allow companies to use the yuan to settle cross-border trade and let them keep their entitlement to export tax rebates, seeking to reduce the reliance of importers and exporters on the U.S. dollar.

The dollar’s role as a safe haven was highlighted last week when the currency advanced 0.5 percent against the euro, to $1.3894, on speculation the global economic recovery is faltering.

Emerging Countries

“Some emerging countries have decided to deal more in their respective currencies and trust each other,” Lagarde said in an interview yesterday. “That doesn’t stop other countries from seeing the dollar, and to a lesser extent the euro, as currencies of trading if not reserve currencies.”

Lagarde said that any discussion of currencies needs to encompass the dollar, the euro, the yuan and the yen and that the meetings of the Group of 20 are the right forum.

“The appropriate platform is the one in which all the major currencies are represented,” she said.

Asked in Aix en Provence about currencies, European Central Bank President Jean-Claude Trichet said it is “extremely important” that U.S. officials remain committed to their policy of supporting a strong dollar.

To contact the reporter on this story: Mark Deen in Aix en Provence, France at markdeen@bloomberg.net; Francine Lacqua in Aix en Provence, France at flacqua@bloomberg.net

The Money is beginning to Flow to Europe: How Chinese Money may make Europe Rise as we Fall




The United States of America assures China that we’re a good investment while allowing the nefarious Federal Reserve to rapidly debase our currency by printing more money; what’s wrong with this picture? The Europeans have reformed their protectionist trade barriers, to Beijing’s delight, and suddenly the Chinese are happy to invest in Europe.  Europe had such a bone headed structure that they didn’t attract a single dollar of Chinese money last year and now the Chinese have something they desperately want: an alternative to investing in the USA.  Even more to the point; as the Chinese find Europe to be an excellent alternative to the USA and as Europe reaps the rewards of all that Chinese money in their economy, the Americans may find the Middle Kingdoms river of endless cash has finally dried up. 

What will Congress do when they can’t get their next “cash fix”?  Granted that the nefarious Federal Reserve has already printed more than enough US Dollars to destroy our currency as key nations cut us off from the credit and investment fix but if China Likes what it finds in Europe than America could be in deep trouble.

If the Chinese and the Arabs find Europe a more productive and safer market they may face the prospect of having to do MASSIVE cuts in entitlements and a tacit admission that the Governments safety net is a cruel illusion when no one will loan us money. Our social saftynet programs like Social Security and Medicare could dry up overnight.  They may have to admit that everything the democrat party stands for in the way of “helping people” simply doesn’t work because the money is gone. Big government is corrupt government and the money for Social Security and Medicare is gone.  We cant afford them without destroying the economy and the end result would be the same.  No more entitlements.

 China has been worried about the security of their investments for some time now and they’ve had high ranking financial officials admit to “hating” the United States, and what we’re doing to the value of their investments, but we’re the only game in town.  China, Russia, Latin America, Iran and the European Community have openly admitted their belief that the world needs “new financial structures” and a new reserve currency that is in no way dependant on the United States or any other single nation.  Essentially the world has been calling for the replacement of the dollar and new non American financial leadership. The world wants a new reserve currency with new institutions and new regulatory structures and they’re tired of funding Washington’s profligate spending.  I don’t think any objective American Observer can disagree with them because it’s become clear that we are suffering from a political as much as an economic breakdown with no likely solutions on the horizon.  What world unity there is on the financial crisis exists as a planetary consensus that America can’t be allowed to run the show anymore and the Europeans with their transnational Euro have the most experience in implementing what the rest of the world wants:  A world reserve currency that no nation can dominate.

While the world turns to Europe, as China is doing, and as Europe discovers the advantages of Chinese and Arab money flowing their way: the one nation left out in the cold with a mountain of crippling debt, engulfed by a tsunami of hyper inflation, encumbered with a dying currency and political turmoil, will be the USA.  The Europeans seem to have better leadership, with Merkel in Germany for example, and they’re doing the right things while we’re doing everything wrong.  It will look obvious in retrospect but we can’t solve our debt problems by adding more debt and pretending it’s a solution. 

Like Detroit we can’t afford our entitlement programs any more than the former Big Three could afford their pensions, and retiree benefits.  Like Detroit the country can’t afford our unions anymore because they’re a death sentence to any industry that is afflicted by them.  The only sector that’s adding jobs, despite being heavily unionized, is government.  The Parasitical Unions have finally found the only kind of host it can co-exist with in government: because government, unlike business, is not expected to be efficient, make a profit, or even be reasonable.  Government unlike the Auto makers can print more money and raise taxes and that’s what they do so they don’t die as fast as a private sector venture. 

But things are getting better!  Aren’t they? 

I too saw a ghost of a smile on the face of Neil Cavuto last week as he reported the generally upward motion of stocks lately; but he also sounded a prudent note of caution.  Our problems are still with us and anything could upset the apple cart with catastrophic ramifications for the American economy.  We’re not out of the woods yet and the wisest and most sober analysts I can find assure us that the worst is yet to come. 

Here’s a little something I found on Bloomberg:

China’s Wealth Fund to Consider Investing in Europe (Update2)

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By Eugene Tang

April 18 (Bloomberg) — China’s $200 billion sovereign fund will consider investing in Europe in 2009, after avoiding the continent last year because of trade barriers, said China Investment Corp.’s Chairman Lou Jiwei.

“Europe has started to welcome investments” without attaching conditions, Lou said today at the Boao Forum in southern China’s Hainan province. “During the world financial crisis, sovereign wealth funds have become more appealing” and less frightening, he said. Beijing-based CIC, whose investments have included stakes in Blackstone Group LP and Morgan Stanley, didn’t invest “a single cent” in European companies or assets last year, because the continent had put up barriers to limit the activities of sovereign wealth funds, he said.

The agency was founded to provide better returns for China’s foreign-currency reserves, the world’s largest at $1.95 trillion. The fund last year earned $10 billion from its investments, representing a 5 percent return, Radio Television Hong Kong reported on Feb. 24, citing a source it didn’t identify.

“There was rising protectionism against China last year, and the European Union had the worst” limits, Lou said today. “They allowed us to invest in no more than 10 percent of a company’s stakes and required us to give up our voting power” in management, he said.

“We couldn’t accept that because investments should be based on market practices,” he said. “With the removal of these conditions, we will seriously consider making decisive and prudent investments overseas this year, including in Europe.”

He declined to specify the European industries or companies he’s looking at investing in.

To contact the reporter on this story: Eugene Tang at Boao on at eugenetang@bloomberg.net

Last Updated: April 18, 2009 06:30 EDT

The New World Order takes over Money: The G20 lays the Groundwork for Financial Domination



Internationalism is the order of the day it seems and with this “global economy” you have to have global regulation, global oversight if not outright global governance.  The way to take over the nations of the world is through the money and economic control.  The military as a means of world domination and conquest is obsolete compared to control of the global economy.  Military’s fight limited and local wars in our time because it’s too blunt an instrument for true global control.  Once you have control of the money the remaining governments of the earth will come along, quietly, non violently, it’s just a matter of time. What goose-stepping armies and panzer divisions couldn’t do can be done far more efficiently by nameless faceless bankers like Ben Bernanke who speak of monetary policy in sonorous hushed tones that immediately dictate the rise and fall of stock markets, economies, and nations.  Like a drug pusher the internationalists believe that once your population sips the wine of middleclass servitude your hooked far more powerfully than if you had taken crack cocaine.  This magical cartel that helps nations iron out their economic difficulties, at the expense of having the cartel manage the currency, bespeaks outrageous power for the governing class, planetary domination for the banking elite, and productive work for the rest of us; perhaps with retirement benefits and even dental coverage. Who can say no to three weeks off each year?

The real news of the G20 meeting is in the international structures that have been put in place and that will grow rapidly.  The language is too arcane for the working people of the world and its self important complexity cloaks the new world order currency as “special drawing rights” at the IMF.  Renaming things has become a habit in the baby boom age but the effectiveness of the tactic was born in the early 1900 when the bankers realized that America would never accept a Central Bank: but it would accept a Federal Reserve System.  If you don’t like what Infanticide implies about yourself or your country just call it a woman’s constructional right to “reproductive freedom”.  Problem solved.  America won’t stand for a new world currency but it won’t even notice “special drawing rights” at the IMF.  The world is being radically changed by innocuous sounding words that no one quite knows the meaning of: like International Contingency Operations is how the elite spell WAR ON TERROR these days.  Cleaver huh?

Well, give the following article by the Telegraph.co.uk a read and remember what it says because they’re giving us a whole new lexicon for post free, neo employee America in a brave new world.


The G20 moves the world a step closer to a global currency

The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity.


By Ambrose Evans-Pritchard
Last Updated: 2:06PM BST 03 Apr 2009

A single clause in Point 19 of the communiqué issued by the G20 leaders amounts to revolution in the global financial order.

“We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity,” it said. SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.

In effect, the G20 leaders have activated the IMF’s power to create money and begin global “quantitative easing”. In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it.

It has been a good summit for the IMF. Its fighting fund for crises is to be tripled overnight to $750bn. This is real money.

Dominique Strauss-Kahn, the managing director, said in February that the world was “already in Depression” and risked a slide into social disorder and military conflict unless political leaders resorted to massive stimulus.

He has not won everything he wanted. The spending plan was fudged. While Gordon Brown talked of $5 trillion in global stimulus by 2010, this is mostly made up of packages already under way.

But Mr Strauss-Kahn at least has resources fit for his own task. He will need them. The IMF is already bailing out Pakistan, Iceland, Latvia, Hungary, Ukraine, Belarus, Serbia, Bosnia and Romania. This week Mexico became the first G20 state to ask for help. It has secured a precautionary credit line of $47bn.

Gordon Brown said it took 15 years for the world to grasp the nettle after Great Crash in 1929. “This time I think people will agree that it has been different,” he said.

President Barack Obama was less dramatic. “I think we did OK,” he said. Bretton Woods in 1944 was a simpler affair. “Just Roosevelt and Churchill sitting in a room with a brandy, that’s an easy negotiation, but that’s not the world we live in.”

There will be $250bn in trade finance to kick-start shipping after lenders cut back on Letters of Credit after September’s heart attack in the banking system. Global trade volumes fell at annual rate of 41pc from November to January, according to Holland’s CPB institute – the steepest peacetime fall on record.

Euphoria swept emerging markets yesterday as the first reports of the IMF boost circulated. Investors now know that countries like Mexico can arrange a credit facility able to cope with major shocks – and do so on supportive terms, rather than the hair-shirt deflation policies of the old IMF. Fear is receding again.

The Russians had hoped their idea to develop SDRs as a full reserve currency to challenge the dollar would make its way on to the agenda, but at least they got a foot in the door.

There is now a world currency in waiting. In time, SDRs are likely evolve into a parking place for the foreign holdings of central banks, led by the People’s Bank of China. Beijing’s moves this week to offer $95bn in yuan currency swaps to developing economies show how fast China aims to break dollar dependence.

French President Nicolas Sarkozy said the summit had achieved more than he ever thought possible, and praised Gordon Brown for pursuing the collective interest as host rather than defending “Anglo-Saxon” interests. This has a double-edged ring, for it suggests that Mr Brown may have traded pockets of the British financial industry to satisfy Franco-German demands. The creation of a Financial Stability Board looks like the first step towards a global financial regulator. The devil is in the details.

Hedge funds deemed “systemically important” will come under draconian restraints. How this is enforced will determine whether Mayfair’s hedge-fund industry – 80pc of all European funds are there – will continue to flourish.

It seems that hedge funds have been designated for ritual sacrifice, even though they played no more than a cameo role in the genesis of this crisis. It was not they who took on extreme debt leverage: it was the banks – up to 30 times in the US and nearer 60 times for some in Europe that used off-books “conduits” to increase their bets. The market process itself is sorting this out in any case – brutally – forcing banks to wind down their leverage. The problem right now is that this is happening too fast.

But to the extent that this G20 accord makes it impossible for the “shadow banking” to resurrect itself in the next inevitable cycle of risk appetite, it may prevent another disaster of this kind.

The key phrase is “new rules aimed at avoiding excessive leverage and forcing banks to put more money aside during good times.” This is more or less what the authorities agreed after the Depression. Complacency chipped away at the rules as the decades passed. It is the human condition, and we can’t change that.


An Offer We Can’t Refuse: The Federal Reserve Chairman Reminds Treasury Who’s Boss!


Here is a Fairy Tale about the Economic State of America followed by the moral of the story. 

In these times of cooperation and mutual love and respect, dare I say unbridled affection, the Department of the Treasury and the Global Banking Cartel that owns our country: (known as the “Federal Reserve Board”) the line blurring what belongs to the controlling super banks (the Fed) and the US taxpayer has blurred so as to be indistinguishable?  It’s as if the superrich, who own the international banking system, and the US government who is blithely stimulating the economy with borrowed money, have joined forces to both bankrupt us and break our currency at the same time.  Heartwarming isn’t it? 

It’s as if the Fed and the US Treasury Department had fallen in love and were in the habit of tucking each other into bed at night with a lingering kiss and a sigh of contentment, glorious unity and harmony between our guardian of tax dollars and the controllers of our currency and the outright lords of international finance.  It’s a love story for the ages: Helicopter Ben Bernanke is our Daddy and Timmy Geithner is our devoted but ditsy Mommy (who sometimes forgets to pay his taxes) but who’s love for Daddy Ben gives us a warm feeling of contentment and security.

But then a snake entered the unholy paradise of the money kingdom and Mommy Geitherner and Daddy Ben began to look at each other strangely each night before falling gently into untroubled sleep and dreams of avarice.

“Ben” Mr. Giethner would say.  “I’m not just Mrs. Benjamin Bernankey but I have an important role in this marriage too.  I’m not just an object of money and signer of promissory notes but the guardian of our nation’s purity and strength.” 

Daddy Ben looked at the Missus with bemusement and affection smiling his enigmatic smile that once so beguiled the young Secretary of the Treasury.  “Don’t you worry your poor little head my dear because as always: Daddy Ben knows best!” Bernankey chuckled, not unlike a serial killer, “On the other hand perhaps we should clear up some of the expectations you need to conform to.  Not just you but Uncle Barak and all those silly people in congress.”  Bernanke chuckled again his eyes becoming cold and reptilian.

“Now Ben….” Giethner said with a small yet hysterical laugh

“Sign this one page division of duties that we may be ever united in our marriage of convenience and combat this financial crisis I caused”. Bernanke intoned in a meanasing whisper that was most unpleasant.

“What does it say” Geithener said nervously.

“You Question me!” Bernanke bellowed as all living parlor left his face.  “You dare question me?  It says you won’t question me ever again in any meaningful way and that I don’t answer to you and that while we’re married, as far as your concerned, I retain my bachelor status.  I decide what needs to be done and you do it.”  Bernanke eyes lit with an unearthly green light.  “It’s a match made in heaven, my dear.”

“Ben, you frighten me when you say things like; you retain your total independence while retaining absolute control over the money.  It makes me think you don’t love me anymore.” Githner looked as young and cute as he could when he said this but his paramour, Helicopter Ben Bernanke, continued to morph into an otherworldly monstrous apparition.  Geithner automatically reached for a pen and signed without reading the document; by now it was habit.

“Very good” the ghoulish Fed Chairman intoned as he handed Geithner a shiny gold credit card.  “Here, go play with this and buy yourself something pretty to stimulate the economy”, the Wiley Banker snickered in spite of himself.  “Spend on and don’t worry: be happy, my dear”.

“Oh good.  I so wanted to go shopping and give ACORN some billions today!”  Geithner uncharacteristically hesitated.  “Are you sure it’s ok for me to go shopping again?  I was thinking of building a space needle in downtown Truth or Consequences New Mexico….. But if we don’t have the money….”

Helicopter Ben roared with laughter once again morphing into the bald prince charming we’ve all come to love.  “Silly goose!” he snickered while tweaking Geithners nose.  “I decide when the spending is over!” 

They both laughed with relief and sheer joy that their spat was over.  And if Geithner wondered if Ben was good for the money; he didn’t show it.  And if Ben wondered if Geithner would ever grow a brain; he didn’t show it either.

Here are some possible morals for our story:  Never take financial advice from someone who thinks you can throw money out of a helicopter to stimulate the economy.

Or perhaps its that a central bank is more dangerous to our liberty than a standing army. 

Or perhaps its that we should always spend less than we make and force the government to do likewise.

Now consider this story below and ask yourself if the day is coming when the interests of the nefarious Federal Reserve and the crack addict spending of the US Treasury Department diverge regarding spending?  Does this portend the eventual pulling of the Rug out from under Geithner and Obama?  Time will tell. I got this Article from Bloomberg and here’s the URL for the whole article:



Bernanke Seeks to Avert Pressures on Fed After Crisis (Update1)



By Craig Torres

on March 23, on a day dominated by release of the Obama administration’s plan to save the banking system and the fourth-best day in postwar Wall Street history, the U.S. Treasury and Federal Reserve released a one-page joint statement on the division of economic responsibilities between the two agencies.

Amid the flurry of news, the statement passed with little public attention; neither the New York Times nor Wall Street Journal printed articles about it the next day. The release said that while the Fed collaborates with other agencies to preserve financial stability, it alone is in charge of keeping consumer prices stable, its independence “critical.”

The statement was the culmination of a behind-the-scenes, two-month long debate involving the Fed’s Open Market Committee, as well as the Treasury. The discussions were driven by Chairman Ben S. Bernanke’s concern that work with the Bush and Obama administrations on repairing banks and markets not lead to attempts at political pressure later that would delay the start of measures to combat inflation.

“This is all about independence,” said Laurence Meyer, vice chairman of Macroeconomic Advisers LLC in Washington and a former Fed governor. “Even though the Fed is cozying up to the Treasury, it is important to know that the Fed would maintain some stability over monetary policy.”

1951 Agreement

JPMorgan Chase & Co. analyst and former Fed economist Michael Feroli called the statement “The 2009 Treasury-Fed Accord,” harkening back to a joint announcement by the agencies in March 1951 that freed the central bank from pegging government-bond rates.

Fueling the debate is the concern that policy makers will have a tough time if they try to end their emergency-lending programs as soon as next year while the unemployment rate, currently a quarter-century high 8.1 percent, remains at elevated levels.

The risk is that, on the one hand, lawmakers and even some administration officials might balk at what they would see as premature steps, and on the other hand that any hesitation on the Fed’s part could spark inflation.

“If we have a slow recovery, which seems likely, who is going to watch them raise interest rates as the Treasury sells this mountain of debt” stemming from fiscal deficits, Allan Meltzer, author of “A History of the Federal Reserve,” said in a Bloomberg Television interview. Politicians “are not going to let them do that, they are not going to want them to do that.”

The Dollar is Running Out of Time: China’s “Bernanke” Calls for Dumping the Dollar & New Reserve Currency



I think the Federal Reserve’s decision to buy a Trillion of American Treasury Bonds, in a naked attempt to monetize or “print the money” has pretty much pushed the rest of the world over the top.  Now the Chinese equivalent of our Federal Reserve Chairman, Zhou Xiaochuan , has called for the formation of a new global reserve currency.  This means dumping the US Dollar for a goofy IMF scheme that’s risky at best: and at worst is yet another world economic meltdown in disguise.  (In addition to being a solid step toward World Government)

China holds a huge amount of our dollars and is concerned that our willingness to print a trillion dollars, at the drop of a hat, will mean that all those dollars are, and will continue to be, dropping in value at a precipitous rate.  I wish I could say that China is wrong but I’m afraid the fault lies with the American Politicians and of course the nefarious Federal Reserve System who always follows its own twisted motives behind a cloak of secrecy. 

Our Political system appears to be broken and the nation seems leaderless as the feckless Barak Obama says one thing and does another. The Congress is out of control,  spending  like theirs no tomorrow, and it seems determined to replace Capitalism with Socialism and the Constitution with Mob Rule. At this critical time in our history we’re now finding that our own corrupt politicians have become the most powerful special interest group in the nation and their interests and those of the American People are diametrically opposed.  We don’t want more bail outs bigger government and more spending but that just doesn’t matter to our paternalist politicians who seem to think that what’s ours is theirs!

What we need is the disempowering of our own political class and a massive cut in government spending, size, and scope at the federal and state levels and often at the city level as well.  We need for the democrats: who today have become outright socialists, if not communists, to stop the spending and the remaking of American into yet another failed socialist state.

The very soul of our nation is at stake as the Chinese Equivalent of Ben Bernanke, the head of the Chinese Central Bank, calls for a new world reserve currency and the ouster of the US Dollar.  Below is a story from the Financial Times concerning our death warrant as a nation. Dollar dumping now will destroy our currency.  A depression is bad enough but to add the stress of a currency collapse can add untold horrors to our children’s future.  This is probably our last wakeup call and if we miss this big reality check from China we’re well and truly up a nasty smelly creek without a paddle. 

Here’s the URL for the Financial Times Story: http://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html


China calls for new reserve currency

By Jamil Anderlini in Beijing

Published: March 23 2009 12:16 | Last updated: March 24 2009 00:06

China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.

Analysts said the proposal was an indication of Beijing’s fears that actions being taken to save the domestic US economy would have a negative impact on China.

“This is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money,” said Qu Hongbin, chief China economist for HSBC.

Although Mr Zhou did not mention the US dollar, the essay gave a pointed critique of the current dollar-dominated monetary system.

“The outbreak of the [current] crisis and its spillover to the entire world reflected the inherent vulnerabilities and systemic risks in the existing international monetary system,” Mr Zhou wrote.

China has little choice but to hold the bulk of its $2,000bn of foreign exchange reserves in US dollars, and this is unlikely to change in the near future.

To replace the current system, Mr Zhou suggested expanding the role of special drawing rights, which were introduced by the IMF in 1969 to support the Bretton Woods fixed exchange rate regime but became less relevant once that collapsed in the 1970s.

Today, the value of SDRs is based on a basket of four currencies – the US dollar, yen, euro and sterling – and they are used largely as a unit of account by the IMF and some other international organisations.

China’s proposal would expand the basket of currencies forming the basis of SDR valuation to all major economies and set up a settlement system between SDRs and other currencies so they could be used in international trade and financial transactions.

Countries would entrust a portion of their SDR reserves to the IMF to manage collectively on their behalf and SDRs would gradually replace existing reserve currencies.

Mr Zhou said the proposal would require “extraordinary political vision and courage” and acknowledged a debt to John Maynard Keynes, who made a similar suggestion in the 1940s.


Bunko! The Federal Reserve Bets the Future of America on a Pair of Two’s: How Desperation at the Federal Reserve May Destroy the Dollar and America’s Future



Bunko!  Hokum!  Flimflam!  Con job!  Snow job!  Played for a Mark!  Played for a Sucker!

America has once again been had by the Nefarious Federal Reserve and the Chief Con Artists of the planet earth: Mr. Benjamin Bernanke! Don’t believe me?

Watch carefully as commodity prices like gold, silver, oil, food and the like begin to rise mirroring a fall in the dollar because in a last desperation move the Federal Reserve has pulled a trillion dollars out of their butt and bought treasuries (American Debt) with it with the idiotic hope that they can stave off a depression.  We can’t.  We’re going into depression but we won’t be alone; we’re taking the rest of the world with us.  Follow along with me as we dissect what the Federal Reserve just did.

The Federal Reserve is not a part of the American Government.  They have a contract to manage the money supply and regulate interest rates but they are a private, profit making consortium of mostly foreign banks that essentially runs our economy. Their mission to run the economy grew out of other depressions in the nations past and it was hoped that this Central Bank i.e. The Federal Reserve System could manage the money supply and interest rates in such a way as to avoid cyclical depressions in the US economy.  Before the Federal Reserve, which is about as “Federal” as Federal express and is as much of a “Reserve” as bankrupt Social Security, depressions occurred at about 60 year intervals.  Since the Fed’s Infestation in America the rate has been a depression every 80 years. Many scholars suspect that the Fed, either intentionally or unintentionally, actually creates our depressions for their own nefarious purposes.  Based on my study of the last few years I think the Fed actually creates depressions for its own reasons and has far more control of world events than the President of the United States.

Thomas Jefferson once said that the creation of a central bank was more dangerous to the Liberty of the American people than a standing army.

Consider a dollar bill.  Look at it and somewhere on there you’ll find the words: “Backed by the full faith and credit of the United States of America”.  In the old days it said that it was backed by gold and fully redeemable at the Treasury of the United States.  What’s the difference?  When your currency is back by gold it’s attached to an asset, a thing of intrinsic value, like gold; and the dollar becomes a stand in for that asset.  When the currency is based on the full faith and credit it’s actually not backed by an asset but is essentially an IOU because that’s what credit is: Credit is Debt.  It’s called a fiat currency and as long as the people running the currency do a good job you can get away with it for a while.  If the currency is badly managed your have problems up to and including the collapse of the currency.  Its value can be derived, like many things, by its scarcity and the demand for the currency. If the world gets flooded with the currency it’s no longer scarce, and if, being no longer scarce, people lose faith in its value, then they dump the currency to get what they can for it.  Its value fluctuates like other commodities and its value becomes a function of what people think and feel about it.

“Permit me to issue and control the money of a nation and I care not who writes its laws” 

Nathan Meyer Rothschild

When a government, like ours, prints a trillion dollars at a crack, as we have done, it devalues the existing supply of money by decreasing its scarcity.  You lose purchasing power because the dollars you have become less scarce and therefore less valuable than they were before.  In this way your savings can be looted by an out of control government that prints money like crazy to cover its own crazy spending by essentially looting the value of the dollars you are holding in savings.  Government, to cover its greed, agrees to let the Federal Reserve make up more money which allows them to put out a fire by making your money worth less.  If the process gets out of control, or it there is a loss of faith by people or governments holding lots of dollar your money can indeed be worthless.

Here is what was just done to finance the astonishing and stupid debt the Neo Socialist Obama Administration has foolishly jammed down our throat to allegedly address the financial crisis and to destroy market capitalism in favor of socialism:

A consortium of mostly foreign bankers, who issue and control our money, has created, from nothing, a trillion dollars of our own money, with interest paid by us for issuing the money, to be used in buying American Debt in the form of Treasury Bonds. Eventually the Treasury will pay off, with interest, to the barer of the bonds,( the consortium of mostly foreign bankers,) with our fiat dollar, based on debt, the value of the Treasuries, with interest, to the consortium of bankers who issue and control our money. Where did the Fed get the money to buy the Treasuries?  They made it up out of thin air.

If you were a nation like China or Japan or Saudi Arabia or Russia who held lots of our dollars and were looking at this rank devaluing of the dollar to fund the pie-in-the-sky utopia of Neo-Socialist Democrats what would you do?  Would you sell your dollars for what you could get and find a new currency to trade in?  Would you demand a world currency that some other government, at its whim, couldn’t devalue just to bail its sorry butt out of the fire?  Is it a coincidence that the United Nations and China and Russia and Europe are calling for a major revamp of the financial system and a new world reserve currency?

“This is a budget only a liberal could love.  We cannot afford to return to the old days of high taxes, more spending and a larger less accountable government”.

Speaker of the House Newt Gingrich

On the 1999 Federal Budget

Why would the country want a consortium of mostly foreign bankers who issues and manages our money to deliberately devalue the currency by PRINTING A TRILLION MORE DOLLARS to fund insane, unsustainable, congressional spending: ultimately financed by the same profit making consortium of mostly foreign banks whom we now owe for buying the debt with our own money created from thin air by the consortium of mostly foreign bankers?????????

If we didn’t spend the money we need not print the money.  If the money is not printed we don’t devalue the dollar.  We might go into depression but when we get through the depression and out the other side: the dollar will still be there.  Now were certain to go into depression anyway and we’ve probably destroyed the dollar to boot. How much more of a con job will the world put up with before dumping their dollars and telling us what to do with them?

 When you see commodity prices go up, oil, gold, food, and the like and the dollar dropping on the world markets you see something that, if it gets out of hand, becomes a run on the dollar, just like a run on the bank, and our currency and economy will be finished for a generation or more. The spending of our politicians is killing the country.  The managers of our money have, with this crazy buying of our debt with our own currency, that they made up out of thin air, may well be the trigger that starts the run on our currency that no one can stop.  Get a good wheel barrow folks because you’re going to need it to buy bread.  If this were a poker game the Federal Reserve just went all in, with all your money, holding a pair of twos, hoping the world doesn’t call our bluff.  We’re in more trouble now than at any time since the Revolutionary War.

“Only a virtuous people are capable of freedom.  As nations become corrupt and vicious they have more need of masters.”

Benjamin Franklin

Here’s an article I found on Bloomberg about the “Rambo Fed” and its antics:


‘Rambo Fed’ Will Buy Treasuries to Combat Crisis (Update1)

By Scott Lanman

March 19 (Bloomberg) — By committing to buy Treasuries and double his purchases of mortgage debt, Federal Reserve Chairman Ben S. Bernanke signaled his determination to avoid a repeat of the Great Depression and his willingness to pump as much cash into the economy as needed to end the current crisis.

U.S. central bankers decided yesterday to buy as much as $300 billion of long-term Treasuries and more than double mortgage-debt purchases to $1.45 trillion, aiming to lower home- loan and other interest rates. The Fed kept its main rate at almost zero and may keep it there for an “extended” time.

The moves sparked the biggest drop in 10-year Treasury yields since 1962, rallies in the stock market and gold and a plunge in the dollar against the euro. Economist Richard Hoey said Bernanke has created the “Rambo Fed,” referring to the Sylvester Stallone character skilled with weapons.

“This is a very powerful and aggressive move,” Hoey, chief economist at Bank of New York Mellon Corp., said in an interview with Bloomberg Television. “One of the reasons I’ve been arguing we won’t have a depression is we’ve got a Fed chairman who understands the problem and is going to come with the right diagnosis and the right medicine.”

With the purchases of Treasuries and housing debt, Bernanke is effectively using the Fed’s powers to print money and aim it where he and other officials believe it will have the greatest impact in lowering borrowing costs.

Bond Reaction

The 10-year note yield fell two basis points to 2.52 percent as of 9:14 a.m. in London, according to BGCantor Market Data. The price of the 2.75 percent security maturing February 2019 rose 5/32, or $1.56 per $1,000 face amount, to 102 1/32. A basis point is 0.01 percentage point.

The Federal Open Market Committee’s decision was unanimous, indicating the agreement to start buying Treasuries quelled disputes over how the central bank should expand its balance sheet. Richmond Fed President Jeffrey Lacker and others favored government-debt purchases instead of intervening in credit markets, as Bernanke has pioneered in the past six months.

Bernanke has studied the Great Depression extensively and published a book of his papers on the subject in 2000. In 1929, the Fed was “essentially leaderless and lacking in expertise,” Bernanke said in a November 2002 speech. The situation led to decisions that were associated with a “massive collapse of money, prices, and output,” he said.

Fed Purchases

Yesterday’s decisions will add $750 billion in purchases this year of mortgage-backed securities issued by government- sponsored enterprises Fannie Mae, Freddie Mac and Ginnie Mae, for a total of $1.25 trillion. The Fed has already announced $217.1 billion in net purchases out of $500 billion planned through June, under a program unveiled in November.

The central bank will also double to as much as $200 billion this year its planned purchases of debt issued by Fannie Mae, Freddie Mac and Federal Home Loan Banks. The Fed bought $44.4 billion of the so-called agency debt as of March 11.

The $1 trillion Term Asset-Backed Securities Loan Facility, which is opening this week to jumpstart consumer and business lending, “is likely to be expanded to include other financial assets,” the FOMC statement said, without elaborating.

The Obama administration is considering melding the Treasury’s plan to set up private investment funds to buy frozen assets with the Fed program, known as the TALF, people familiar with the matter said. Treasury Secretary Timothy Geithner may make an announcement as soon as this week, after his first unveiling of the strategy caused a sell-off in financial stocks.

‘All Tools’

“This is not really a victory for Lacker,” said James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. “Lacker seems to be arguing for Treasury purchases instead of targeted programs. They are instead supplementing the targeted programs. They are just using all tools.”

The New York Fed will concentrate Treasury purchases among two- and 10-year securities. The transactions will take place two to three times a week, and the Fed may also buy other maturity Treasuries and Treasury Inflation-Protected Securities, according to a New York Fed statement.

The moves may more than double the Fed’s balance-sheet assets by September to $4.5 trillion from $1.9 trillion, said John Ryding, founder of RDQ Economics LLC in New York.

At the same time, the changes increase the danger, once the economy recovers, that the Fed won’t be able to unload the securities quickly enough to raise interest rates and counter inflation, said Ryding, a former Fed economist.

‘Evolving Circumstances’

Bernanke floated the idea of buying Treasuries in a Dec. 1 speech. Then the FOMC said in its last statement on Jan. 28 that the Fed would be “prepared” for the purchases if “evolving circumstances” indicated their effectiveness.

The option gained ground after the Bank of England succeeded in lowering long-term rates by buying U.K. government bonds known as gilts in a program announced this month, said Lyle Gramley, a former Fed governor. The 10-year gilt yield slid to the lowest level in at least 20 years after the purchases began.

“Our objective is to improve the functioning of private credit markets so that people can borrow for all kinds of purposes,” Bernanke said at a Feb. 24 Senate hearing. “We are prepared, and we want to keep the option open to buy Treasury securities if we think that is the best way to improve the functioning or reduce interest rates in private markets.”

While Treasury yields fell, the strategy isn’t guaranteed to work in reducing other rates.

The Fed is “naive” if officials think the move will lower borrowing costs, said Doug Dachille, chief executive officer of New York-based First Principles Capital Management. The “historic precedent” of when the Treasury Department was buying back debt amid the budget surpluses of the Clinton administration show it may fail to do so, he said.

To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net.

Last Updated: March 19, 2009 05:21 EDT


March 19 (Bloomberg) — The rally that pushed the dollar to the highest levels since 2006 is in danger of crumbling as the Federal Reserve starts buying Treasuries and ramps up its purchases of mortgage debt, adding to a flood of greenbacks.

“The implications of today’s Fed decision are unambiguous,” currency strategists at Citigroup Inc. wrote in a research report within a half hour of the Fed’s decision yesterday. The dollar “should weaken,” they said.

Fed policy makers said yesterday they plan to buy as much as $300 billion of U.S. government bonds and step up purchases of mortgage bonds, expanding the central bank’s balance sheet by as much as $1.15 trillion. The extra supply of dollars threatens to overwhelm investors just as the budget deficit swells.

The trade-weighted Dollar Index, which tracks the currency’s performance against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, tumbled 2.7 percent to 84.595, its biggest one-day drop since 1971. That pushed its decline to 5.6 percent since reaching 89.62 on March 4, the highest in almost four years.

It fell yesterday by the most in nine years versus the euro, to $1.3474, and traded at $1.3631 as of 12:01 p.m. in London. The dollar dropped today against Japan’s currency to a three-week low of 94.72 yen.

“Sell the dollar!” said Scott Ainsbury, a portfolio manager who helps manage about $12 billion in currencies at New York-based hedge fund FX Concepts Inc. “This is huge, huge. It’s equivalent to the Plaza accord. This is the last thing they have in the closet, and they used it a bit early.”

Rally Reversal

In 1985, the U.S., U.K., France, Japan and West Germany agreed at New York’s Plaza Hotel to coordinate the devaluation of the dollar against the yen and the deutsche mark.

The Dollar Index started to slide in 2005 on concern about the widening current-account deficit and reached a record low in the first quarter of 2008 as credit market losses mounted following the crash of the subprime mortgage market.

It then rallied in the second half of last year as the global recession spurred demand for haven assets such as Treasury bills. Rates on bills fell below zero percent in December. UBS AG currency strategist Benedikt Germanier in Stamford, Connecticut, said he is sticking with his forecast for the dollar to trade at $1.30 per euro over the next month.

‘Pretty Big’

Yields on 10-year Treasuries declined the most since 1962 after the Fed said it would concentrate purchases in notes due from two to 10 years. The central bank is expanding its quantitative easing policy, which already includes agency and mortgage debt, to more than $1.85 trillion in securities.

“We’ve been selling dollars and we’re now adding to that short,” said Jim McCormick, Citigroup Inc.’s London-based global head of currencies. “The Fed program announced last night is pretty big both in terms of magnitude and breadth.”

McCormick said the dollar may fall to $1.40 against the euro.

The purchases will bolster concern that inflation will accelerate as borrowing costs fall, said Jessica Hoversen, a foreign exchange analyst with MF Global Ltd. in Chicago.

‘Dollar is Done’

“The Fed is basically financing our deficit by buying the debt issued by the Treasury,” she said. “If the Obama administration pushes through another stimulus package, the dollar is done.”

President Barack Obama is seeking Congressional approval for a $3.55 trillion budget for the year starting in October that would increase spending by 32 percent to kick start the economy. Goldman Sachs Group Inc. estimates the U.S. will almost triple debt sales this fiscal year ending Sept. 30 to a record $2.5 trillion.

The euro will probably rise to $1.3590 in two weeks provided it holds above $1.3330 through March 20, Hoversen predicted. It may rally above $1.39 “sooner than we think,” Citigroup analysts Tom Fitzpatrick in New York and Shyam Devani in London wrote in a research note yesterday.

Trading patterns also suggest the dollar is poised to weaken. Europe’s common currency took 26 days to break through $1.3117 on Dec. 11, before appreciating to the 200-day moving average above $1.47, the Citigroup analysts wrote. Yesterday’s break occurred 27 days after the euro established a resistance level on Feb. 9, suggesting it may “explode” higher, they wrote.

The euro, the Norwegian krone and the Australian dollar will outperform as those nations’ central banks hold out longer against the temptation to print money, said Dale Thomas, head of currencies at Insight Investment Management, which oversees about $121 billion in assets.

‘Timing Difference’

“All the major central banks may end up in the same position,” London-based Thomas said. “The way we look to play it is to see which goes the first and which one lags, and try to explore the timing difference between the two.”

Central banks are grappling with how to steer their economies when interest rates are already close to zero.

The Bank of England is buying government bonds and corporate debt to unlock trading in frozen credit markets and stimulate the economy. The Bank of Japan is snapping up government notes and making subordinated loans to banks, and the Swiss National Bank is selling francs to prevent gains against the euro.

Fed policymakers have committed to buy or lend against everything from corporate debt, mortgages and consumer loans to government bonds as they try to end the seizure in credit markets.

The extra yield relative to benchmark interest rates that investors demand to own debt backed by consumer loans has soared amid concern that defaults will climb.

Bond Spreads Wide

Spreads for top-rated bonds backed by auto loans are trading at about 300 basis points more than the one-month London interbank offered rate compared with 65 basis points in January 2008, JPMorgan Chase & Co. data show. One-month Libor, a borrowing benchmark, is currently 0.55 percent. A basis point is 0.01 percentage point.

“We cannot rule out that this will place additional pressure on other central banks to follow suit,” wrote David Woo, the global head of foreign-exchange strategy at Barclays Capital in London. “Should this turn out to be the case, deflationary concerns in the market may begin to give way to longer-term worries about monetary inflation.”

To contact the reporters on this story: Oliver Biggadike in New York at obiggadike@bloomberg.net; Ye Xie in New York at yxie6@bloomberg.net.

Last Updated: March 19, 2009 08:06 EDT