The graphic on FOREX reserves firmly proves the point that the balance of power has shifted to developing nations. Wealth accumulation leads to shifts in bank power. If the existing structures do not incorporate and accommodate the new reality, then new structures will come into form and take root. The US and UK have given nothing but lip service to Chinese, Arab, and Russian demands, their creditors. The time for revolt is here.
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United States Economy, U.S. Dollar and the China Factor - by Jim Willie CB
Foreigners are aghast at four new trends. They lose respect when the financial market rules change periodically, obviously to favor the insiders, elite, and connected. They lose respect when the approach taken by the Obama Administration is marred by lack of consistency, coordination, or even thorough research. They lose respect at the flow of $trillion$ in rescues and redemptions for failed institutions, most of which are responsible for the global crisis. They lose respect at the prospect of $trillion$ in ongoing federal budget deficits as far as the eye can see. They lose respect at the prospect of $trillion$ in monetized US$-based bonds, with the prospect of repeated announcements.
View Ben Bernanke, now turned commodity supplier. He is shoveling and humping around confetti laced with mold reinforced by a massive flow of swill, and does not even realize it! Forget the helicopter images. His partner ‘TinyTim' Geithner is an outright rookie with a very questionable past record, whose errors are too numerous to properly cite, starting with the ruinous decisions he recommended for Indonesia with the IMF during the 1998 Asian Meltdown. Details of harsh criticism, hardly reported by the US press networks, were delivered by former Australian Prime Minister Keating.
Acceleration in flow of funds is necessary to sustain a bubble, and a similar acceleration is necessary to prevent a bubble collapse. These are characteristics of a Third World nation's management of a currency that has the unique advantage of operating as the global reserve currency. Such a juxtaposition has never in modern financial history been witnessed before. The perceived abuse by the Untied States is incredible, as numerous syndicates continue to operate under the protection of the system's many appendages. It is no wonder that foreign creditors are both aghast at the situation in the Untied States, and mobilized to defend themselves.
The longer foreign nations wait to establish a multi-polar global reserve working alternative, employed broadly within their continental regions, laced within banking and commerce, the greater their loss will be to wealth funds and the greater the disruption will be to their entire economies, their standard of living, and their internal political stability. So let's see what China is up to.
Chinese leaders are openly critical and expressing deep anxiety. Debate is rampant inside China about the wisdom of continued support to purchase US Treasury bonds. These are preliminary tectonic shifts to be identified before important new financial structures come to fore. They will disturb the US Dollar system at its global foundation, with much inherent hegemony. The shock waves will come region by region, in a succession. By attracting a lot of attention to this issue, China has decided to attempt to gain influence at the G-20 meeting. The sequence is simple, from offshore manufacturer to trade partner to global adversary to large scale credit provider to angry creditor to credit master, and maybe to receivership committee governor.
