As reported today, Paul C. Volcker, former Fed Chairman, is the single most important man in the world to the future worldwide economy (see www.village.albourne.com search “ditmo” article “Defining the Obama Presidency: Single World Currency”).
Mr. Volcker is long a proponent of single world currency that requires a World Central Bank. To do that we need to overturn the Federal Reserve Act in deference to a World Central Bank under the auspices of a non-governmental Basel III accord consortium of central bankers and risk experts (GARP, EDHEC Research, etc).
The creation of a World Central Bank and Single World Currency will cause worldwide markets to flourish in an albeit short term, but peaceful environment. Rogue nations will be incapable of aggression facing immediate impoverishment. U.S. security going into the future destabilizing nuclear weapon scenarios will depend on the creation of this World Central Bank. Currency and détente will be a single policy.
How will this happen? The U.S. currency I believe will enter into a death spiral to latter 2011 reflecting a loss of balance between fiscal and monetary policies that will become evident to foreign funders of U.S. debt that will, in turn, discontinue funding U.S. Treasuries to finance the imbalance. The Fed will have to choose between massive unemployment or hyperinflation and economists will ultimately defer to Volcker’s plan to create a single world currency and a World Central Bank.
The only way this won’t happen is if the BALANCE between fiscal and monetary policy is restored, but the funding required by U.S. Treasuries will transcend the threshold of foreign investors, I believe, by 2011. This liquidity crisis was presaged in 1998 when institutional “barrier options” caused a crisis with Chase and Salomon Bros (ask any derivatives Salomon Bros trader who was there) but was averted by capital infusion. The problem surfaced in an exponential size in the recent crisis and I wrote multiple articles (see www.village.albourne.com search “ditmo”)about the inevitable meltdown in the Summer 2007 before the crisis took notice. The coming hyperinflation crisis will eventually lead to a single world currency and World Central Bank that will create flourishing world markets in a (short term) peaceful environment. That is bad news that will eventually lead to a world market panacea. In the meantime, strategy should reflect stable but no growth sideways markets.
