Dollar to be Replaced with IMF’s SDR as Reserve Currency?

We will see. IMO it is not a matter of if but of when.

Jim O’Neill, who did not make any friends within the bear community earlier today, has written an interesting paper on the IMF’s Special Drawing Rights, and whether this hypernational currency can ever become a reserve currency as is, and/or with the CNY as a constituent member. While O’Neill as usual focuses on the angle of the “next paradigm” BRICs, and how they will increasingly dominate global economics, he does pose an important question: with the dollar likely to suffer the side effects of either hyperdeflation, hyperinflation, or hyperstagflation, will the next reserve currency be a diluted melange of other flawed fiat constructs (i.e., the SDR), or the currency of the one country, which for all its flaws, still has the cleanest balance sheet backing its own fiat construct. On the other hand, the question of whether this analysis is moot to begin with, and the world will revert to the gold standard as the ongoing crisis of confidence in all paper money flares up, is not raised even once… We wonder (not really) what Jim O’Neill would have to say on that particular issue.

Here are the main bullets:

— The issue of the ‘international reserve currency’ and the possible role of the IMF’s Special Drawing Rights (SDR) has moved from obscurity to the centre of discussions about the future.
— Given China’s importance in terms of its share of world trade, the CNY should now be part of the SDR. The case for including it can only become more obvious as this decade progresses.
— However, actually including the CNY as a constituent of the SDR is likely to remain a challenge without the CNY becoming more widely used internationally, including as a reserve asset.
— The case for including other BRIC currencies in the SDR, especially the RUB, is also likely to become stronger over the coming decade.
— Although the Dollar will probably not be as dominant in 2020 as it is today, it is far from clear that it needs to be replaced by the SDR—or by anything else—as the main reserve currency.
— For the SDR to be attractive to private users, it will need to include the CNY and possibly other BRIC currencies. However, this alone would not guarantee that the SDR would be more attractive to private investors.

The paper is a critical follow up to anyone who found Albert Edward’s earlier analysis of collapsing global FX reserves relevant.

Full story HERE.

State Pensions Now Federal Issue as Bailouts May Top $1 Trillion

IMO, the feds may end up taking all of our pensions, 401k's, IRA's, and dump them into social security. How would you like that?

U.S. states reportedly face a funding gap of at least $1 trillion for the retirement benefits they have promised teachers, firefighters and other public sector employees.

With financial year 2011 less than six weeks away, Illinois, for example, faces unfunded liabilities of about $78 billion, the biggest pension hole in the United States, and contributions of more than $4 billion for 2011, the largest single element of its $13 billion budget deficit, the Financial Times reports.

Illinois is the poster child of unfunded pensions in the United States. But state retirement systems could become a national concern, the Times reported, citing new research.

Joshua Rauh, associate professor of finance at the Kellogg School of Management at Northwestern University said that, without reform, some state pensions might run out within the decade, the Times reported.

By 2030, as many as 31 states may not have the money to pay pensions.

And, if these funds exhaust their assets, the size of payments for the benefits they have promised will be too large to cover through taxes, putting pressure on the federal government for a bailout that could potentially cost more than $1 trillion, he says.

“It is more than a local problem,” Rauh told the Times. “The federal government could be on the hook.”

Robert Megna, New York’s budget director, said his state had had to make “tough choices” to keep funding its pensions despite budget shortfalls over the past few years.

On March 31, the state made a nearly $1 billion payment for the last fiscal year.

“We had to make cuts: education, healthcare, local government support and not-for-profit providers,” Megna said of the last year’s budget process.

This year, a dozen states have enacted pension reforms more substantial than the minor ones of the past, stateline.org reports.

Among these are Illinois, which raised its retirement age to 67 from 62 for new hires, Wyoming, which began asking current state workers to contribute to their retirement, and Utah, which closed its defined benefit plan to new workers.

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Ron Paul: Euro Bailout Will Lead To Currency Collapse

When men give warnings they are not usually acted upon until it is too late. Well, it may be getting to late but we shall see.

By Paul Joseph Watson

As Europe is bailed out to the tune of nearly $1 trillion dollars, Congressman Ron Paul warns that the constant monetization of debt, allied with taxpayer-funded bailouts, will inevitably lead to runaway inflation and the collapse of paper currencies.

Under the terms of the Federal Reserve’s credit swap deal with the EU – in addition to an additional IMF bailout of which U.S. taxpayers will be picking up 20 per cent ($57 billion dollars) of the tab, Paul pointed out that not just taxpayers but “anybody that buys anything” will be funding the European bailout because of the attendant inflationary consequences.

“The prices are going up already, producer prices are going up, the cost of living will go up so everyone in American will suffer and eventually the whole world will suffer because we cannot carry the whole world with our dollar,” Paul told Fox Business, adding that eventually people will lose confidence in the dollar

The Congressman agreed with the host that the bailouts would lead to the crash of paper currencies, noting that last week’s stock market turmoil was accompanied by gold acting as a currency rather than just reacting to the value of the dollar.

“Gold has been money for 6,000 years and it will remain that way and it will rule the roost,” said Paul, adding that the dollar was weak in comparison with the strength of gold.

“All paper currencies are under attack and this cannot be sustained,” said the Congressman.

Paul then explained how the ECB has completely reversed its promise that it wouldn’t monetize debt and how Bernanke had also gone back on his word that U.S. dollars would be use for this purpose. “When I talked to Bernanke last time in the Committee he said they had no intention of bailing out Greece but they are, through the IMF as well as opening up these swap lines to all the central banks, so it is on the shoulders on the burden of the American taxpayer and our dollar so all we’re doing is perpetuating a very very bad system and this is not a solution at all,” he said.

Paul agreed with the host that the bailout was merely a stunt to buy time while failing to address the underlying problem of European socialism and the entitlement culture, which is fast running out of money with which to keep itself ticking over.

The True POWER And The RIGHT of The JURY

Why Judge Fogleman needs to be voted out of office

I am doing this for two reasons. First it is my duty to inform my fellow citizens of the truth. Second this is to inform the voters of Arkansas of an Arkansas Supreme Court Candidate who doesn't believe the truth about Jury Nulification. That man is Judge John N. Fogleman.

I had a discussion with Mr. Fogleman in Clinton Arkansas on March 13th 2010 over Jury Nullification. I asked the Judge if he believed in Jury Nullification and he said no he does not, because they are only to judge the facts of the case, (not the validity of the law).

I challenged him over the issue because our founding fathers have said the Jury has the right to judge both the law and the facts. The Judge challenged me back with his version of the facts and that Mr. Thomas Paine is a founder that would support his view. I responded with some other founding fathers to support my view.

NOTE: Not all the founding father agreed on all the issues. Jury nullification was decided by consensus.

We ended the discussion with an agreement to research the matter: "The Power and the Right of the Jury to judge both the law and the facts is the issue that will be decided." I just hope that Mr. Fogleman has done his own research to double check himself. I also hope that upon the facts I have found that he would change his position. If he changes his position then a citizen should consider voting for him. However, if he does not amend his erroneous view, then a citizen should not vote for him because that would be re-installing a judge who does not uphold the Constitution.

You may be asking why are you doing this? I am doing this because the truth needs a crusade and I am a firm believer that the "Truth is not always in the majority." Just because the majority says so does not always make it right or the truth. Also this has to do with tyranny and liberty. His position is one of tyranny (It may not be purposeful but his viewpoint could be one of ignorance.) My position is one of freedom, liberty, and the American way and these liberties are in jeopardy in direct proportion to the deviation from the Constitution.

I have collected the quotes from several sources to keep from being accused of cherry picking. The founding Fathers, Supreme Court Justices, Court Rulings, news articles, and The JURY HANDBOOK.

First here is some quotes from some founding fathers and etc.

"The jury has a right to judge both the law as well as the fact in controversy."
John Jay, 1st Chief Justice U. S. Supreme Court, 1789.

"The jury has the right to determine both the law and the facts."
Samuel Chase, U. S. supreme Court Justice, 1796, Signer of The unanimous Declaration.

"The jury has the power to bring a verdict in the teeth of both law and fact."
Oliver Wendell Holmes, U. S. supreme Court Justice, 1902.

"The law itself is on trial quite as much as the cause which is to be decided."
Harlon F. Stone, 12th Chief Justice U. S. Supreme Court, 1941.

"The pages of history shine on instances of the jury's exercise of its prerogative to disregard instructions of the judge..."
U. S. vs. Dougherty, 473 F 2nd 1113, 1139, (1972)

"Why do we love this trial by jury? Because it prevents the hand of oppression from cutting you off... This gives me comfort-that, as long as I have existence, my neighbors will protect me."
Patrick Henry (Elliot, 3:545, 546).

Links for verification: HERE, HERE, HERE, HERE, and HERE.

You see it is you the jury that have the final say. Our founding fathers put the power in to the people’s hands. Why? To keep us safe from bad law and tyranny of the government. It was also to protect us from corrupt judges, prosecutors, city councils, city boards, county boards, county quorum court, state legislatures, and federal legislatures.