Global Currency System Advocated By Cornell Law Professor

Robert Hockett, Professor of Law at Cornell Law School, teaches and writes in the areas of domestic and international financial law and economics. Writing in Benzenga article Global Currency Relations, Macroeconomic Recovery, and Long Term Financial Stability he documents that competitive currency devaluations that persisted in the 1930 have returned. And relates that “Our only long term answer is a truly global currency; a truly cooperatively owned and operated global ‘bank’ that manages, in the name of all nations, global credit supplies denominated in that currency; and procedurally regular, automatic adjustment mechanisms that revalue national currencies in relation to one another to prevent sustained cross-border surpluses and deficits.”

In my November 18, 2010 article I write: Stocks Soar As The UK Is Likely To Participate In A European Bail Out Of Ireland’s Banks, I write: The risk on trade is not back on. Today’s rise in World Stocks, ACWI, and in the emerging markets, EEM, is simply a green shoot rally in a very strong debt-deflationary down draft. Risk aversion is still the market trend. Risk appetite does not exist as today’s action is simply a reflex action to apparently good news.

Beginning on November 5, 2010, the bond traders seized control of both long-term interest rates, such as the Interest Rate on The US 30 Year Government Bond, $TYX, and short term rates that were formerly under the control of the world central bankers. EconomicPolicy Journal reports 30-Year Mortgage Rate Jumps Up to 4.39%. And Mike Mish Shedlock reports today: Full Year Of Muni Gains Wiped Out In 2 Weeks. Bond vigilantes will continually be taking interest rates higher as the US Federal Reserve’s Quantative Easing constitutes monetization of debt and European Sovereign debt and other sovereign debt issues remain substantially unaddressed.  

There is a “trigger” for all things economic. It was the Leaders’ Announcement of a Debt Default Mechanism – a crisis mechanism which would be used in the event of a sovereign default, as Econogirl reported on October 28, 2010, that lead to a blast higher in periphery European sovereign debt interest rates in November 2010, as well as a run on Ireland’s banks, that brought about today’s negotiation of of seigniorage aid for Ireland.  

The currency traders have established themselves as the world’s sovereign governing power; their rule over the world’s governments began on November 5, 2010 when the Interest rate on the US Government Bond, $TYX, sustained above 4%, and as they sold the major currencies, DBV, and emerging market currencies, CEW, which has been called the US Dollar, $USD higher.

It may seem that the world government leaders are in control, but the currency traders, still have the upper hand and will continue their program of competitive currency deflation, that is competitive currency devaluation another day.

The currency traders commenced a global currency war November 5, 2010, against the world governments. Today was simply a strong battle day, in an ongoing struggle, to control the world, its peoples and resources.

Ambrose Evans Pritchard in a recent Telegraph article, used the word “Götterdämmerung“, a particularly apt word, to describe the apparent fatal wound to the world’s financial, economic and political systems which is coming soon, as bond traders continue calling interest rates higher, such as the US mortgage rates, and the Interest Rate on the US Government 30 Year US Treasury bond; and as currency traders continue a global sell off of the world’s currencies, as both conduct a war for sovereignty against the world central bankers and world leaders.

God was gracious to provide Revelation 13:3, which reveals that the soon coming apparent fatal wound to the world’s economic and political systems will be healed.

But that it will come at the cost of the rise to power of a world Sovereign and also a world Seignior, the latter comes from Old English and means top dog banker who takes a cut.

Out of the coming investment “flame out”, a global leader and a global banker will rise to establish order: a Sovereign and a Seignior will ascend to govern the world. Their word, will and way will be the law of the land superseding constitutional law and traditional rule of law that comes with national sovereignty.

Perhaps Herman Van Rompuy will rise to be The Sovereign as  the Afteramerica website relates that he has called for global governance: nation states are dead … The EU chief relates the belief that countries can stand alone, is a ‘lie and an illusion!’

And perhaps Tony Blair, because of his business connections, will rise to be The Seignior.

Or perhaps the Seignior will be Olli Rehn, one known for calling for calm as related by Ambrose Evans Pritchard in article Telegraph article Greek Rescue Frays as Irish Crisis Drags On: The eurozone bail-out for Greece has begun to unravel after Austria suspended aid contributions over failure to comply with the rescue terms, and Germany warned Athens that its patience was running out. The clash caught markets off-guard and heightened fears that Europe’s debt crisis may be escalating, with deep confusion over the Irish crisis as Dublin continues to resist EU pressure to request its own rescue. Olli Rehn, the EU economics commissioner, said escalating rhetoric in Europe was turning dangerous. “I want to call on every responsible European to resist the centrifugal tendencies and existential alarmism.”

And yet again, it might be the co-chair of the Council on Foreign Relations, the CFR, Robert Rubin, who was Treasury Secretary. He is shown in a 1995 photo by Stephen Crowley of The New York Times, with Alan Greenspan, who was Federal Reserve Chairman, at a House Hearing, in The New York Times article The Reckoning Taking Hard New Look At A Greenspan Legacy by Peter S. Goodman, who said of Alan Greenspan: “And his views held the greatest sway in debates about the regulation and use of derivatives, exotic contracts that promised to protect investors from losses, thereby stimulating riskier practices that led to the financial crisis. For more than a decade, Alan Greenspan has fiercely objected whenever derivatives have come under scrutiny in Congress or on Wall Street. He related: “What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn’t be taking it to those who are willing to and are capable of doing so,” Mr. Greenspan told the Senate Banking Committee in 2003. “We think it would be a mistake” to more deeply regulate the contracts, he added.

All seigniorage will come and go through The Seignior: all sovereign wealth funds, and banks will report to him, as there will be unified regulation of banking globally as referred to, in the James Politi and Gillian Tett Financial Times article, NY Fed Chief Timothy Geithner In Push For Global Bank Framework.

Soon there will be no national seigniorage anywhere as sovereign debt interest rates will explode to the point where there will be no buyers. This is already the case for Portugal, Italy, Ireland, Greece and Spain — they have lost their seigniorage authority. Their fiscal needs are provided for by the ECB which buys their bond issues, as well as debt from their banks. The ECB is the sole lender to these nations. Currently the ECB is The European Seignior.  

Sovereign nations and their constitutions will be history, as principles of global governance working through regional economic and security pacts and leaders’ agreements will serve as the basis for regional currencies or a global currency.

The Seignior’s financial and economic power will complement the military and political power of the Sovereign; and between the two they own the world “lock, stock and barrel”.


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