Current Events-Babylonian economical dilemma

http://www.schwab.com/public/schwab/resource_center/expert_insight/todays_market/sonders/sonders_110912.html

"Even if the United States falls off the "fiscal cliff," the hit to the economy will probably be gradual."

This is speculation. Although it seems that "gradual" falls, shifts, or collapses are advocated by the IMF as found out later in this post.

"And while the fiscal cliff probably figured into the recent market pullback, it's not the only contributor."

This is true. But the "market" is an extremely unpredictable machine to begin with anyway. Most people see it as an indicator of world trends pertaining to a wide array of global issues.

"Resolution to this issue, the continuation of positive trends in housing and manufacturing, and fundamental tax reform could help give the economy a boost."

This is a statement made towards the distracted masses. The economy must be shattered in order for a global economy to be unleashed. The fact the economy/dollar is being setup for failure is evident in policies that pertain to money handling. The links below show that a move towards a global currency is clearly underway. This is no longer "conspiracy theory".

I was going to attempt to debunk all of this person's arguments in this article but have found it unnecessary in light of the facts listed below.




Reserve currencies come and go. Before 1944, the world reference currency was the Pound Sterling. After World War II, the international financial system was governed by a formal agreement, the Bretton Woods system. Under this system the United States dollar was placed deliberately as the anchor of the system, with the US government guaranteeing other central banks that they could sell their US dollar reserves at a fixed rate for gold until 1971 when FIAT was introduced.

http://en.wikipedia.org/wiki/Reserve_currency

However, The Triffin dilemma (or the Triffin paradox) is a theory that when a national currency also serves as an international reserve currency, there could be conflicts of interest between short-term domestic and long-term international economic objectives. This dilemma was first identified by Belgian-American economist Robert Triffin in the 1960s, who pointed out that the country whose currency foreign nations wish to hold (the global reserve currency) must be willing to supply the world with an extra supply of its currency to fulfill world demand for this 'reserve' currency (foreign exchange reserves) and thus cause a trade deficit. The use of a national currency (i.e. the U.S. dollar) as global reserve currency leads to a tension between national monetary policy and global monetary policy. This is reflected in fundamental imbalances in the balance of payments, specifically the current account: some goals require an overall flow of dollars out of the United States, while others require an overall flow of dollars in to the United States. The Triffin dilemma is usually used to articulate the problems with the U.S. dollar's role as the reserve currency under the Bretton Woods system or more generally of using any national currency as an international reserve currency.

In the wake of the financial crisis of 2007–2008, the governor of the People's Bank of China explicitly named the Triffin Dilemma as the root cause of the economic disorder, in a speech titled Reform the International Monetary System. Zhou Xiaochuan's speech of 29 March 2009 proposed strengthening existing global currency controls, through the IMF. This would involve a gradual move away from the U.S. dollar as a reserve currency and towards the use of IMF special drawing rights (SDRs) as a global reserve currency. Zhou argued that part of the reason for the original Bretton Woods system breaking down was the refusal to adopt Keynes' bancor which would have been a special international currency to be used instead of the dollar. American economists such as Brad Delong agreed that on almost every point where Keynes was overruled by the Americans during the Bretton Woods negotiations, he was later proved correct by events. 

Zhou's proposal attracted much international attention; in a November 2009 article published in Foreign Affairs magazine, economist C. Fred Bergsten argued that Zhou's suggestion or a similar change to the International Monetary System would be in the best interests in both the U.S. and the rest of the world. While Zhou's proposal has not yet been adopted, leaders meeting in April at the 2009 G-20 London summit agreed to allow 250 billion SDRs to be created by the IMF, to be distributed to all IMF members according to each country's voting rights. On April 13, 2010, the Strategy, Policy and Review Department of the IMF published a comprehensive report examining these aforementioned problems as well as other world reserve currency considerations, recommending that the world adopt a global currency called the "bancor" and that a global central bank be established to administer such a currency. In this report, the current issues with having a national global reserve currency are addressed. The merits, difficulties and effectiveness of establishing a multi-currency reserve system are weighed against that of the SDRs, or "basket currency" strategy, and those of establishing this new "global reserve currency". A new multilateral framework and 'multi-polar system' for managing capital flows and national debts is also called for, but the IMF cautions that it prefers a gradual shift to this new framework, rather than a sudden change.

http://en.wikipedia.org/wiki/Triffin_dilemma