http://rawstory.com/…

The United Nations Conference on Trade and Development said in a report published Monday that the U.S. dollar should be replaced as the world’s standard reserve currency, giving rise to a new global currency managed by an as-yet undetermined financial regulatory organization.

The conference specifically emphasizes the enhancement of the International Monetary Fund’s “special drawing right” (SDR), which may serve as the “supranational” currency.

“There is a need to make the IMF a true representative of the world’s leading economies. It’s not there right now,” said Russian finance minister Alexei Kudrin in June, noting that China had a lower representation quota than Switzerland or Belgium.

Over the weekend, U.S. Treasury Secretary Timothy Geithner argued successfully to strengthen the “Basel II” framework for international commerce, which would see all G20 member nations increase their currency liquidity and allow centralized, “global supervision” of financial industries. The Obama administration is committed to full compliance with the framework by 2011.

The Group of 20 finance ministers and central bank governors plan to meet in Pittsburgh, Pennsylvania on Sept. 24 and 25. Several major liberal groups are planning demonstrations, including the A.N.S.W.E.R. Coalition. The city has already secured a deal to use National Guard troops provide a security buffer for the world’s financial elite during their meeting.

Also on Sunday, a key Chinese official predicted that the dollar’s increasing supply, which grows with added liquidity, meant the currency could “fall hard” within “a year or two.” The official also signaled that China is moving its reserves away from the dollar and toward gold, euros and yen.

Washington has staunchly defended the dollar as the world’s reserve, with President Obama, Federal Reserve chairman Ben Bernanke and Treasury Secretary Timothy Geithner all insisting there is no need for a new global reserve currency.

The outcome will be bad but at least we can watch the elites fight between themselves till then.

http://www.bloomberg.com/…

Federal Reserve Chairman Ben S. Bernanke, who led the biggest expansion of the central bank’s power in its 95-year history to battle the worst economic slump since the Great Depression, will be nominated to a second term by President Barack Obama.

Bernanke “has led the Fed through one of the worst financial crises that this nation and this world have ever faced,” Obama said in remarks prepared for delivery today at 9 a.m. in Martha’s Vineyard, Massachusetts, where Bernanke is to join him.

“As an expert on the causes of the Great Depression, I’m sure Ben never imagined that he would be part of a team responsible for preventing another,” Obama said. “But because of his background, his temperament, his courage, and his creativity, that’s exactly what he has helped to achieve.”

Bernanke’s nomination for a second four-year term starting Jan. 31 requires Senate approval and was endorsed by the head of the Banking Committee, Christopher Dodd. The Fed chief will still face tough questioning from lawmakers who say he was slow to recognize the severity of the mortgage crisis and didn’t do enough to protect American consumers while leading bailouts of financial firms including Bear Stearns Cos. and American International Group Inc.

Obama decided to reappoint Bernanke because he wanted to keep together the team that had weathered the crisis, an administration official said. The official said Treasury Secretary Timothy Geithner, Chief of Staff Rahm Emanuel and National Economic Council Chairman Larry Summers all recommended Bernanke be reappointed.

“May whatever god you believe in have mercy on your soul.” –Q

This isn’t surprising in the least… but really… “expert in the Great Depression”… I don’t see it. “Responsible for preventing another?” I strongly disagree. He’s not to blame for the Greenspan and legislative policies that helped get us to this place… but he’s surely responsible for the Keynesianism on crack corporatism that he’s pushed for and implemented. He’s also to be criticized, as the article mentions, for the biggest expansion in central banking power ever.

As this video is called: Ben Bernanke was wrong

Why would you want the same people who caused this problem to be the ones with the charge to fix it… especially when their solution is a continuation of that which lead to the problem?

http://www.reuters.com/…

U.S. Treasury Secretary Timothy Geithner on Monday reassured the Chinese government that its huge holdings of dollar assets are safe and reaffirmed his faith in a strong U.S. currency.

A major goal of Geithner’s maiden visit to China as Treasury chief is to allay concerns that Washington’s bulging budget deficit and ultra-loose monetary policy will fan inflation, undermining both the dollar and U.S. bonds.

China is the biggest foreign owner of U.S. Treasury bonds. U.S. data shows that it held $768 billion in Treasuries as of March, but some analysts believe China’s total U.S. dollar-denominated investments could be twice as high.

“Chinese assets are very safe,” Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.

His answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.

Next time may I recommend a rotten tomato or two? Just for theatrics. Don’t hit the man. He’s sad enough.

http://www.ft.com/…

The Federal Reserve has been hobbled by at least two major shortcomings that were primarily responsible for the current and several previous credit crises. Its failure to spot the importance of changing financial markets and its commitment to laisser faire economics were big mistakes and justify a fundamental overhaul of the Fed.

Bill Bonner puts it well over at FleetStreetInvest.co.uk:

How about that? America’s largest car company is going to be state-owned… nationalized… presided over by the federal bureaucrats.

It’s just a part of the shift away from the free market and towards an un-free market. Free market capitalism has failed, say the pundits. Let’s give the feds a chance.

Even Henry Kaufman, writing in today’s Financial Times, says that the Fed’s “libertarian dogma” prevented it from controlling the banks properly.

But the Fed is hardly a libertarian organization. It’s a banking cartel. As a cartel, it looks out for its member banks – and doesn’t hesitate to use state power to do so. There is nothing libertarian about it… and no dogma associated with it – except as Greenspan’s eyewash – that is even vaguely libertarian.

The Fed colluded with member banks to fix interest rates. In so doing, it helped create the biggest bubble in credit the world had ever seen. It was a terrible thing for the average fellow – who was lured deep into debt by rising house prices and cheap credit. But it was a great thing for the members of the Federal Reserve cartel. Profits in the financial sector – notably, the big Wall Street investment banks – soared.

But bankers are vulnerable to too much of a good thing – just like everyone else. Soon, they made the classic Wall Street mistake – they came to believe their own hype. Not only did they gin up trillions of dollars’ worth of preposterous financial instruments… they actually bought these debt bombs from each other.

This posed a grave danger to the nation’s economy… and to the banking system. Henry Kaufman claims the regulators dropped the ball because they put too much faith in the free market. But the regulators were little more than front men for the banks themselves. After Alan Greenspan came Henry Paulson as head of the Fed. He was probably still replying to messages at his old address when the crisis began. And the head of the New York Fed – now, US Treasury Secretary Tim Geithner – was elected to his post by the very institutions he was supposed to be overseeing.

Neither of them was about to stop the party; they and their friends were having too much fun.

I agree it was inconsistency which helped lead to this. You can’t supercharge an industry and remove the governors (regulations) and not expect shit to hit the fan eventually.

Let’s be consistent. Remove the supercharger. Remove the governors. Stop tweaking with a system you can’t possibly control and leave it be. Get rid of the Federal Reserve and it’s monoply on interest rates and money and credit creation. Remove it’s monopoly on legal tender. Treat fractional reserve banking as the fraud it is (in its current form anyway). Allow the bubble created “too big to fail” failures to fail and go into bankruptcy. Oh and stop handing out our grandchildren’s future tax dollars on failed institutions.

Speaking of which… yesterday Obama said that the government should spend as much on R&D as on the military. On Slashdot someone asked why when we are already in debt would we be spending money on something that would help us but costs would be placed on our children. A response was that it would more likely help them because the advancements would come out later.

My question is… what moral authority does this guy have spending future generations money (which will be forcefully taken from them) regardless of who it will directly effect? Is that not taxation without representation? They have had no say in the matter. Why not let the bureaucrat tyrants of their own time decide how best to steal from them?

I watched this live and cracked up when he said this. I was just amazed by his arrogance or perhaps delusion. I’m not the only one.

Geithner’s Arrogance Knows No Bounds

Inquiring minds are listening to Geithner explain to Congress how his plan works. Here is a transcript of a conversation between Rep Gresham Barrett and Treasury Secretary Geithner.

Rep Gresham Barrett: “The last question I have guys, which is the $64 million question or I guess I should say $64 trillion question is: What’s the backup plan? If everything fails what do we do? Where do we go from here?”

Treasury Secretary Geithner: “Congressman this plan will work. This plan because of the authority provided not just by Congress but the treasury and the Fed gives us broad ability to do what you need to do to get through a financial crisis like this. It just requires will; It’s not about ability. We just need to keep at it. We just need to work with Congress to make sure we do this on a scale that will make it work.

Someone needs to get this Jon Stewart on the Daily show. I think he will have a field day with “It [The Plan] just requires will; It’s not about ability.” Unfortunately, Geithner’s attitude is more scary than it is funny.

“If you’ve got a squirt gun in your pocket you may have to take it out… If you’ve got a bazooka, and people know you’ve got it, you may not have to take it out.” — Treasury Secretary Henry Paulson on a law enacted in July gives the US government the authority to buy shares or offer liquidity to the companies to keep them afloat.

It only took a month, but Paulson plans on whipping it out on Monday.