By George Whitten, Jerusalem Bureau Chief
The United Nations has called for the replacement of the U.S. Dollar and the creation of a global reserve bank and a new global currency to protect emerging markets from the “confidence game” of financial speculation according to a report obtained by Worthy News.
The report, published by the United Nations Conference on Trade and Development, said one solution could be the “issuance of special drawing rights (SDRs)” through the International Monetary Fund (IMF) multilateral development banks. The report called for “an international reserve system that uses one or several national currencies as a reserve asset” as a means of international payments.
Earlier this year, China called for the creation of a new global “supranational currency” such as the International Monetary Fund’s special drawing rights (SDR’s), to add stability to global financial markets.
The UN said in its report that, “Such a multilateral system would tackle the problem of destabilizing capital flows at its source.” It would, the UN added, “remove a major incentive for speculation and ensure that monetary factors do not stand in the way of achieving a level playing field for international trade.”
The UN stressed a new financial system would also “get rid of debt traps and counterproductive conditionality.” It also said that “countries facing strong depreciation pressure would automatically receive the required assistance once a sustainable level of the exchange rate had been reached in the form of swap agreements or direct intervention by the counterparty.”
China, India, Brazil and Russia have called for a replacement to the dollar as the main reserve currency after the worldwide financial crisis was sparked by the collapse of the U.S. mortgage market.
On Sunday, a key Chinese official warned about the collapse of the dollar saying, “If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies.”
China holds more than $2 trillion dollars in U.S. bonds, the largest in the world.
‘The day that story broke people bought half a million’
By Bob Unruh
Million dollar Gospel tract
The Way of the Master, a Christian ministry run by evangelist Ray Comfort and former child actor Kirk Cameron, is reporting a sudden rush by people getting the million-dollar bill Gospel tracts its Living Water Publications produces.
Todd Friel, a spokesman at Way of the Master Radio, told WND that while “Gospel tracts usually turn out to be litter faster than a candy wrapper,” the opposite is true with these Gospel messages.
Even an event such as the recent incident in Pittsburgh when police arrested a man who handed a $1 million bill tract to a grocery store cashier generates a way for the biblical message to be spread.
Officers in that case reported the bill originated with the Dallas-based ministry, but the man was arrested after he flew into a rage, slamming an electronic funds-transfer machine into a counter and reaching for a scanner gun after the clerk refused to accept the tract as money and the manager confiscated it.
Friel said he sometimes wonders why a Gospel tract with a picture President Grover Cleveland and a message of salvation gets so much attention.
“That’s exactly the question we’re asking ourselves,” he told WND. “And with all the different phony bills out there, why does this particular one seem to get so much attention?
“Maybe it taps into that human desire for money,” he said, but whatever the reason, the ministry is happy to print and distribute them as fast as possible, based on its ministry mission statement.
Ray Comfort and Kirk Cameron
“One hundred fifty thousand people die every 24 hours – most without the Savior,” that statement says. “We are deeply concerned that so few Christians reach out to the lost. Statistics show that this is as low as five percent. One of the reasons for this is that many don’t feel equipped. As a ministry, our sole purpose is to inspire and equip Christians – to teach them how to share the gospel simply, effectively, biblically … the way Jesus did.”
The million dollar question: Will you go to Heaven? Here’s a quick test. Have you ever told a lie, stolen anything, or used God’s name in vain? Jesus said, “Whoever looks upon a woman to lust after her has committed adultery already with her in his heart.” Have you looked with lust? Will you be guilty on Judgment Day? If you have done those things God sees you as a lying, thieving, blasphemous, adulterer at heart. The Bible warns that if you are guilty you will end up in Hell. That’s not God’s will. He sent His Son to suffer and die on the cross for you. Jesus took your punishment upon Himself -”For God so loved the world that He gave His only begotten Son, that whoever believes in Him should not perish but have everlasting life.” Then He rose from the dead and defeated death. Please, repent (turn from sin) today and trust in Jesus, and God will grant you everlasting life. Then read your Bible daily and obey it.
The publishers hope the demand for the tract is because of the message. At a minimum, they know the message is getting distributed.
“The day that this story broke – God has a funny way of working things – people bought half a million of these tracts,” Friel said. “Maybe they were afraid they’d all be confiscated.”
He said the ministry, which produces more than 24 million of all of its tracts annually, has discovered that the million dollar bill has staying power.
“At a baseball game, I’ve almost been mauled when I start handing them out,” Friel said. “People actually want them. I’ve been stopped at Customs and they see them in my luggage and everyone wants one.”
He said he’s also seen them posted in bank windows, stashed in tip jars and he’s heard from Muslims in Pakistan who have gotten them and seen a positive change in their lives.
The tracts have been in the news before: About a year ago the U.S. Secret Service seized a stock of the tracts in Texas, alleging they were counterfeit, even though since 1969 the highest legal denomination in the United States has been the $100 bill. That case currently is on appeal.
Friel said the message will continue, no matter what the outcome.
“If the government takes these million dollar bills, the ministry has a Billion Dollar bill tract that is in full color, and very popular. If those are seized the ministry has plans to get a Brazilian Dollar Bill printed, with a picture of the Brazilian president on it,” he said.
So far, they’ve also been subjected to confiscation in Nevada and California.
Jim Thomas, who with his wife Charlene had just finished an evangelism training program at their church, told WND he was handing out the tracts near an escalator at a downtown Los Angeles mall “and everything was going very well.”
Then, he said, a man approached him and told him that “there’s a problem here.”
He introduced himself as a Secret Service agent.
“He began to ask me questions, like ‘have you read the rules and regulations about bills similar to currency?’” Thomas said. “So he just kind of informed me what I could do to be in compliance.”
Yet U.S. taxpayers helping Beijing as part of trillion-$ credit bailout
By Bob Unruh
While Chinese companies are in line to benefit directly from U.S. taxpayers’ $700 billion-plus bailout of Wall Street, Fannie Mae, Freddie Mac and other financial institutions, Beijing is stiffing the U.S. for $100 billion or more in unpaid debt.
The status of the Chinese economy, including its repudiated debt, has prompted one analyst to warn of an “ominous threat” involving China’s finances and suggest the possibility of “a dramatic reversal” for the “so-called Chinese Miracle.”
“One of the greatest problems facing China is the government’s failure to acknowledge and effectively address the true extent of state institutions’ bad debt,” Kevin O’Brien writes in an article titled, “Reassessing China’s Sovereign Risk: Emerging Global and Domestic Trends Threaten the ‘Chinese Miracle.”
O’Brien’s report was published at a website for the Global Association of Risk Professionals, a not-for-profit independent trade association of risk management practitioners around the world. It has 77,000 members from fields such as banking, investment management and academics.
One problem that should be addressed, he writes, is the $260 billion in sovereign debt owed U.S. and other investors which China has said it simply won’t repay.
“The repayment obligation was inherited by the People’s Republic of China, when the communists took control in 1949. The successor government doctrine of settled international law affirms continuity of obligations among international recognized successive governments,” O’Brien said.
“The PRC is the internationally recognized successor government … which contracted the credit sovereign debt … and which had a loan agreement that states that such debt is intended to be ‘a binding engagement upon the Republic of China and its successors.’”
The bonds, however, were excluded from a 1979 settlement of Chinese debts and in 1987, China even “concluded a discriminatory settlement accord with bondholders in Great Britain – an agreement that excluded from settlement any bonds held by non-UK citizens.”
Then in 2006, the Chinese Ministry of Finance issued an official communiqué addressed to “the Embassy of the United States of America in China,” in which the Chinese government formally repudiated China’s defaulted full faith and credit sovereign debt and announced that it would not repay any debt held by American citizens, O’Brien said.
The repudiation still stands, even though the China Economic Review confirmed that major Chinese banks own $8 billion in Fannie Mae and Freddie Mac securities that are the targets of bailout provisions.
“Bank of China said last month it owned $7.5 billion in Fannie and Freddie bonds,” the report continued. “The bank also held $5.2 billion in mortgage-backed securities guaranteed by the two agencies.”
Those owners will be among the beneficiaries of the overall bailout plan assembled by the government and funded by taxpayers to “rescue” bad debt created by an agenda of loaning money to “subprime” recipients who may not have had the wherewithal to repay the loans.
Recipients of the U.S. taxpayers’ generosity also may include various private Chinese interests with investments in American real estate and mortgage.
As recently as three weeks ago, China Investment Corp. was in active discussions to buy into U.S. financial institutions, including Morgan Stanley.
All the while Congress has been aware of the Chinese default but unwilling to mandate action.
Elton Gallegly, a California Republican in Congress, called it the “China debt syndrome.”
“After Saddam Hussein’s government was replaced in Iraq, China demanded that the new government pay off the debt Saddam’s regime ran up against China. China prevailed and is getting 100 percent of the more than $10 billion Iraq owes it,” he said in a recent commentary.
“China, however, refuses to recognize the debt its current government inherited when the communists took control in 1949. That debt includes about $260 billion on bonds issued by the former Republic of China. Of that, more than 300 American citizens are owed nearly $100 billion from bonds on which the People’s Republic of China has defaulted,” the congressman wrote.
“It’s time China owned up to its international obligations. Pressure is the only thing China understands. And pressure works. Americans weren’t the only ones owed billions when the communists seized control. British citizens were among the bondholders communist China had been ignoring. That lasted until 1987, when Great Britain enacted a law denying Chinese access to British capital markets and China responded by negotiating a settlement to pay off the bonds,” he wrote.
Now, he said, China is in negotiations with France on defaulted bonds but “continues to ignore the United States.”
He said worse than the actual monetary loss is the message that suggests China “does not have to play by the rules when it competes in the global economy. This helps explain Beijing’s refusal to abide by trade agreements, the manipulation of its currency, its underwriting of the genocidal regime in Sudan and its financial relationship with the terrorist-sponsoring government in Iran.”
“To that list we can add China’s refusal to crack down on the widespread theft of intellectual property. The piracy of U.S. movies, books, music and other products is costing Americans billions of dollars each year,” he said.
China, meanwhile, is boasting of its economy growth and influence. On a Chinese-promoted website today the headlines bragged: “China ranks among the world’s top 30 economies,” “China Investment Corp to start investing in Japan stocks” and “China’s ship industry strives for No. 1 spot.”
A resolution similar to Gallegly’s also has been introduced in the Senate. The plan by Sen. James Inhofe, R-Okla., targets China’s attempt “to conceal its defaulted government debt from investors.”
“The Senate measure labels China’s present ‘investment-grade’ credit rating as artificial and in testimony before the Senate Banking Committee, SEC Chairman Christopher Cox acknowledged that wrongful actions by a credit rating agency may subject the agency to revocation of its SEC registration,” an announcement said.
At Washington Watch, the criticism focused on the U.S. credit rating agencies that have allowed the situation to remain under the radar.
“In China’s instance, the three largest rating agencies (Standard & Poor’s, Moody’s and Fitch) are accused of intentionally violating their published criteria and metrics,” said the report. “Sovereign Advisers, a risk metrics firm assisting the defaulted creditors of the Chinese government, has performed comprehensive research on this matter and has provided the U.S. Congress and the Securities and Exchange Commission with evidence suggesting that the actions of Standard & Poor’s and Moody’s were intentionally designed to conceal the Chinese government’s debt repudiation and establish an artificial sovereign benchmark in order to increase ratings revenue from expanded securities issuance by Chinese corporations.”
On the Washington Watch website, several participants in an online discussion expressed concern over the situation.
“It is about time the PRC was made to pay for their financial indiscretions from the past,” said one.
“The situation is crystal clear,” said another. “China has an obligation and if it wishes to operate globally it must meet this and any other obligations.”
“If it walks like a duck, quacks like a duck, looks like a duck. China’s credibility should be disclosed so investors are aware of the risk. China needs to pay its debts,” added another.
Gallegly’s effort also was to encourage that knowledge among investors.
“This action will put all investors on notice that China has refused to honor its obligations in contravention of international law,” he wrote. “It will also encourage China to negotiate in good faith with American bondholders to settle their claims on defaulted bonds.”
O’Brien called China’s actions “selective default.”
He said that’s “a practice whereby a government selectively defaults on one specific class of full faith and credit soverereign obligations … yet honors repayment to selected creditors of a separate class..”
“China’s refusal to honor repayment of its full faith and credit sovereign debt to American bondholders is best characterized by a statement that appeared in a recent news article: ‘When it comes to territory, China claims Tibet and Taiwan based on historical claims predating the current communist government assuming power, but when it comes to debts owed to American citizens, it’s a different story,” he wrote.
WND also has reported extensively on a long list of defective and even dangerous products that have been exported from China to the U.S.