The Coming International Setting of Currencies - Soon

Today Fox News reportedly got a hold of a transcript of Federal Reserve Chairman Ben Bernanke saying that he believes there is little risk of the European economic crisis taking out our recovery. Here is a link to the story.

MSNBC - Economy Watch - Bernanke warns of possible European 'contagion'

Bernanke's Transcript - The European Economic and Financial Situation

Here is what is really going on, as Mr. Bernanke states in his transcript, he doesn't think a Euro default would hurt the United States because we have lent them billions of dollars and traded an untold amount of dollars for foreign currencies in order to stabilize their currencies and provide them liquidity. This is gobblygook for they are holding trillions of dollars in our currency and our security is their soon to be worthless paper, how does this not effect us?

Bernanke says, "I would add that the swaps are very safe from the perspective of the Federal Reserve and the U.S. taxpayer. They present no exchange rate or interest rate risk; each drawing has a short maturity and must be approved by the Federal Reserve; they are collateralized by the foreign currencies for which dollars are swapped; and our counterparties are the foreign central banks, not the foreign commercial banks that receive the dollar loans".

What he said was not completely true. What he failed to say was that those same foreign central banks were allowed to loan those dollars to the foreign commercial banks. He sort of left that out and for good reason. If those commercial banks (think Goldman Sachs) loaned those dollars out and cannot buy them back then the central banks don't get them back and we don't get them back. We just end up with a lot of worthless Euros and our dollar also becomes worthless.

Now what will be the solution to this impending problem. Nigel Farage knows, it will be greater international control over the setting of currency values. Hyperinflation would result in all debt being eliminated and cataclysmic deflation would result in all debt being eliminated because nobody would even be able to pay the interest. While both may sound attractive, the solution of international control over currency valuation means a loss of sovereignty as occurred in Greece. Dostoyevsky once said that people will trade their freedom for comfort and they will. In this case we will trade our freedom for debt relief and that is the real purpose behind all of this.

In reviewing the statement by Ben Bernanke I was not given the impression that there would be no harm to the US should the Euro fail, but there has been some preparedness with diversification of risk to help ease such fallout, if it does eventuate.

Third and finally, leaders of most of the members of the European Union have approved a new fiscal compact treaty that strengthens fiscal rules and their enforcement. This treaty represents a positive step toward resolving the fundamental tension inherent in having a monetary union without a fiscal union, and thus should help bolster the viability of the euro-area economy in the longer term.

How the implications of this fiscal union merge with national governments of the EU does sound like an inevitable power play with the aim to relegate member nations to state status with the governing EU body. There has always been a lot of tension within the growing structure of the EU, but so far it has held it together despite all the creaks and groans. Greece is the test case for managing the issue of national debt in the EU context with lots of contingencies getting setup and explored for all involved.

Now what will be the solution to this impending problem. Nigel Farage knows, it will be greater international control over the setting of currency values.

Currently I do agree with reducing the financial conflict and leaching that is going on in the international currency markets. There is also a risk of even higher levels of corruption with centralisation of currency control. But there is also the potential to help stabilise the global economy if proper accounting of national supply, demand and currency liquidity is applied.

The main question I see confronting the people of Greece is, are they Greek or European? Of course they are both, but when push comes to shove where will they stand between the two?

reply to post by kwakakev


Dear kwakakev,

Thank you for your comments, I am amazed at how few people bothered to notice this thread as these issues will effect us all.

The main question I see confronting the people of Greece is, are they Greek or European? Of course they are both, but when push comes to shove where will they stand between the two?

The problem is they are not being allowed to vote on the answer. The birthplace of democracy is the first place to see none. Greece is now being run by a puppet and foreign banks and the people have had no say in it. Peace.

reply to post by AQuestion


This is not easy stuff to work out and does take years of research to grasp some idea of what is going on, something more that it is all crap.

While the right to vote and self determination as a nation is being dismantled as the EU grows, the peoples capacity for civil disobedience, strike and revolution is a possibility. The final line is when the Greece national army is divided due to the impacts governance policy is having on the population. Chances are that any such conflict will put more power into the EU's hands when it comes to cleaning up, but depending on how other EU nations respond as this debt problem is not confined to a single nation, it could either kill or strengthen the EU. It will at least redefine it.

Originally posted by AQuestion
In this case we will trade our freedom for debt relief and that is the real purpose behind all of this.

I'm hardly a hardcore conspiracy nut but this is akin to what I believe. Some people are whooping over here saying the crisis is the death of the EU or the Euro. I'm saying in your dreams! It's all about problem - reaction - solution.
I won't use that hackneyed term 'elite' but we are kidding ourselves if we think that those at the very top of the political/financial echelons aren't as much in control as they always were. What is happening is what was meant to happen. Whether the financial crisis is accompanied by war or not - the whole affair will be used (IMO) to bring about a tighter EU and ultimately global union.
Though there are a couple of positives to this (and it will be sold to us as such) - with stronger extradition laws between European countries, the creeping unification of police and military, 'easy' extradition between UK and US - ultimately there will be nowhere to run.