The World Financial System – Shape of Things To Come …

The US President, flanked by Treasury Secretary, Jack Fleischacker, and Paul M.Gruber, Governor, European Central Bank, in a stunning move, announced the merger and re-capitalisation of the IMF and World Bank – a plan to rescue world economy.

IMAR

The new entity has been named as International Monetary Authority & Reserve (IMAR) – and will operate from Paris. It has been given the responsibility for world’s economic stabilisation.

The Governing Council Members will initially comprise of 3 internationally respected financial authorities and investors. The Chairman is likely to be Barran Wolfet and his team members are Sorg Goros and Rim Joggers. “The selection of the Governing Board was done on the basis of consensus and the expertise of the incumbents. This is not the time for being narrow – when the future of the global financial system is at stake.”, said Governor Gruber.

Capital Subscriptions

The US has subscribed to promissory notes worth 25,000 tons of gold, currently held at Fort Knox. The ECB will subscribe to the tune of 20,000 tons of gold – to be held at various European national Government vaults. Australia and Canada have also announced subscriptions to the tune of 10,000 tons of gold each to be held in bonded vaults at Montreal and Canberra respectively. Britain and Switzerland have committed 5000 tons – out of the Bank of England and Schweizerische Nationalbank (SNB) reserves. These countries will be allocated voting rights proportionately, based on IMAR gold reserve subscriptions.

The US dollar will now be backed by IMAR promisorry notes – which President Jack Boucher, asserted will create confidence in the US dollar – and in the world financial system.

Governor Gruber remarked,”The Bretton Woods Agreement has facilitated a “historic economic expansion in the global trade” – and this new measure will further strengthen the Bretton Woods system. IMAR single-point agenda is stabilization of the global economy.” Country reserves will be nominated on the basis of IMAR promissory notes – and countries will report on these regularly. Total monetary aggregates for the national economy will also see a change. “Old economic measures like M3 money figures will no longer be relevant in the era of derivatives and options”, said Gruber.

The ASEAN, Chinese and Japanese Governments have cautiously welcomed this move, with a joint declaration saying “this will hopefully lend some stability to the US dollar – and the trillions of reserves that we maintain”. The new martial law administrators in the South African Government are due to the announce their subscriptions soon. Saudi Arabia, Iraq, the UAE and Singapore have announced that they will be committing substantial assets towards their share of subscriptions. Russia is still undecided – and expected to approve soon.

Criticism

India has criticised the move strongly. Prime Minister, Sonia Gandhi said, “this new system will perpetuate existing economic systems and divisions.” Iran’s President, Mohammed Hussaini bluntly dismissed this development and said, “the developing world will not have a voice in the new organization.”

The new Indian Finance Minister Banta Singh said,”This will not help in restructuring the international finacial systems. This is not the ‘new financial architecture’ that we are want.” When asked what his ideas were were declined to reveal them, as “it too premature.”

The IMAR Governor, Wolfet rejected the criticism, saying, “IMAR will be a international body – for implementing a rescue plan for the world economy. Developing Countries will have 50% representation on the Director’s Register. They, can get even higher voting rights by increased subscriptions. Our past experience shows that countries print currency – and risk global financial equilibrium. We cannot allow that to happen again.”

US and the EU have also announced a doubling in aid allocations. Instead of outright grants in aid, transfers will now be based on mutual trade norms. African countries, for instance, will be able to develop trade with the West – while receiving aid. EU and USA will commit to specific trade volumes, such that Africa will be able to develop, for instance, its mining and resource based industries.

Currency Fluctuations

Governor Gruber claimed that “currency fluctuations are a thing of the past, as trade will now be denominated by currency demand and supply. International currency acceptance will be determined by IMAR reserves of each currency system.”

Gold Reserves

The most interesting part of this development is the quantum of gold being committed by the subscribers. The ECB and the Federal Reserve have been able to fulfill their subscriptions based on gold reserves that they have enhanced in the last few months.

It is being whispered that Barran Wolfet and his team members, Sorg Goros and Rim Joggers had played a major role in the enhancement of these gold stocks – and the formation of IMAR. Initially named as Global Financial Reserve Authority for Development, the IMAR idea was first tossed out over a dinner at the famous Les Ambassadeurs eatery – which offers a classic cuisine by the Ducasse-trained chef, Jean-François Piege.

Want to decode this news? What this really means for you! Ask St.Barnum, The Propaganda Slayer.

Post Script

On 8th October, 2008, it was reported, that both the Republican and Democratic  candidates concede that Warren Buffet …

would be a good replacement for current Treasury Secretary Henry Paulson who is standing down at the end of the current administration.

“I think the first criteria, would have to be somebody who immediately Americans identify with. Immediately say we can trust that individual,” said McCain. Buffett, chief of the Berkshire Hathaway holding company, has supported Obama in the race for the White House.

India – Beyond Individuals

“Whenever and wherever there is a decline in righteousness, O descendant of Bharata, and a rise of evil — at that time I manifest myself. To deliver all those who believe in goodness and to annihilate the evil, to reestablish righteousness, I will appear, in millennium after millennium.” Bhagwad Geetha IV, 7-8.

Who was Kalidasa? No one quite knows. After composing some of the best lyrical poetry ever, (in Sanskrit), little is known about him. His life lives in his works. Who was Ved Vyasa – the writer of Mahabharata? Or for that matter Valmiki! No one knows. About any one of these people.

Yet, whenever, India had needed, inspirations have come. To lead us … असतो मा सद्गमय From untruth to the truth … तमसो मा ज्योतिर्गमय … From darkness to light … मृत्योर् मा अमृतं गमय … from termination, to eternity …

Tipu Sultan unceasing opposition for more than 30 years (The Mysore Wars – 1767-1799) to the foreign rule before the 1857 War made the British rulers cautious about waging war in India. Immediately thereafter was the challenge of the Sikh qaum – led by Ranjit Singh. The death of Ranjit Singh in (1839) gave them another opportunity. Then followed the Afghan wars and the Sikh Wars (between 1839-1850). In 1857 was the India‘s first war of Independence.

From 1857 to the 1900, the British colonial government decimated Indian leadership. Bahadur Shah Zafar was sent to Rangoon. Rani Lakshmibai of Jhansi. Ahalyabai Holkar. Tantia Tope. Leader after leader came to the fore. And India continued to redefine itself.

From feudal and hereditary leaders, the leadership slowly changed. From political to social. In parallel. In 1828, Raja Ram Mohan Roy formed the Brahmo Samaj. In 1875, Swami Dayanand formed the Arya Samaj. On 24th December 1892, Swami Vivekananda reached Kanyakumari – after travelling across India. He was entertained by rajas and the रंक (commoners) of his day.

Then followed the political leadership. Dadabhai Naoroji’s (Congress President in 1886, 1893 1906) research and quantification of the British Loot from India started a new set of leaders against colonial rule – and a new definition of India. Tilak’s demand for ‘swaraj’ and ‘swadeshi’ goods unnerved the colonialists. The colonial British Government deported Balgangadhar Tilak to Rangoon. He came back stronger than before. In other countries, when old leaders and rulers were removed or replaced, those countries descended into dictatorship, confusion, poverty. In India, we had wave after wave of leaders – and each time India moved forward. In a direction which has no precedents in world history.

What Happened In Other Countries

Why do Australia and Canada still acknowledge the British Queen as the head of the state? Spain has Juan Carlos I as its king! Did you know that Belgium has Albert II as it King? And Queen Beatrix rules over Holland (The Netherlands). King Akihito is venerated by the Japanese – and is the head of the state. Sweden is ruled by King Carl XVI Gustaf. Luxembourg has the Grand Duke Henri as its equivalent to a King! King Harald V lords over Norway! Queen Margrethe II rules over Denmark. The world still has quite a few monarchies – especially in the OECD. Why?

France removed and guillotined the monarchs – and they got Napoleon Bonaparte, as dictator! Russia tried – and they got 70 years of communist dictatorship. Italy asked King Victor Emmanuel III to go – and got Mussolini. The British exiled the Kaiser of Germany – and the Germans had to put up with Hitler thereafter.

Britain terminated the Turkish Ottoman Empire – and Turkey got a benign dictator, Mustafa Kemal Attaturk, and then not so benign dictators – and is yet to recover! East Europe (Romania, Poland, Czechoslovakia, Albania, etc) promptly started fighting with each other, within and without – after the kings were removed. China became communist after the last emperor – and still has a communist dictatorship. Iran, Egypt, Iraq, Libya, most of Africa, South America – same or similar story.

This history is why Canada and Australia cling to the skirts of British Monarchy.

Republican Democracy

America became one of the first successful Republican democracies – from 1789, when George Washington became the first elected President of USA. (70 years later there was a Civil War). America survived.

Israel, (propped up by massive US aid) is another country which has been a republican democracy for more than 50 years. Switzerland (with guaranteed neutrality from the European powers) is another in modern history to survive 50 years of republican democracy. Srilanka has been another country which has survived 50 years as republican democracy – but just about.

India is the youngest Republican democracy – and we have completed a historic 50 years as republican democracy – Jan 26th 1950, till date.

Gandhiji’s Conquest

But before the republic, came the unification of India – the crowning achievement of Gandhiji. Not the political union (achieved by Sardar Patel) – but the ideological union!

Garibaldi (united Italy), Bismarck (united Germany), Simon Bolivar (liberated and united South American countries) were unifiers who succeeded with the help of armies.

Gandhiji (armed with a walking stick) unified a larger India (and Pakistan) without an army. An India and a Pakistan – bigger than what the largest empire in the history of the world, the British Empire could not conquer with its armies.

One Clean Break

To make a one clean break from the feudal-colonial past – and succeed! That is a dream – never before in the history of the world. India made history – by surviving for 50 years with a republican democracy.

In 1947, India was a feudal society with more than 500 Kings and (some) Queens at the time of Independence. (No, the British did not rule over all of modern India). Large parts of India also had to change from a colonial mindset.

How Is India Unique

However, no other country has 15 official languages.

Switzerland has only 4. Sri Lanka’s Sinhalas do not want to accept Sri Lankan Tamils as full and equal citizens – hence the 20 year old civil war.

Social Equality

The liberation of Blacks in the USA is a 1970s phenomenon. It took non-violent protests (Martin Luther King) and violent threats (Malcolm X) for some kind of real emancipation and equity to come in.

Blacks in the USA legally got full and equal liberty only in 1964 after President Kennedy’s Civil Rights Act of 1964. Earlier in 1954, President Eisenhower had to send in the army (the National Guard). In the Cold War scenario, under international media glare, during the Little Rock School stand-off, Eisenhower (a Southerner himself) reacted. The Mayor of Little Rock, Arkansas closed down the school rather than de-segregate. De-segregation (between the Blacks and Whites) happened clearly and fully only by 1970-75. Non-violent protests by Martin Luther King (inspired by Gandhiji’s) till 1968 and violent threats by Malcolm X thereafter, made desegregation a reality. Not to forget Martin Luther King’s assassination in 1968. The eyeball-to-eyeball confrontation during the Kennedy years produced the Civil Rights Act of 1964.

But, Gandhiji’s first step, after coming back from South Africa, (many decades before India’s Independence, Unification and the creation of the Republic) was to start social reform against untouchability.

Enforcement – or Help

India and America, created their own constitutions without external enforcement. Republican democracy in Germany was imposed by the Allied Powers – hence their record is blemished.

Religions

In most countries, religion divides. In India, we are different. India has the world’s second /third largest Muslim population. The Indian Christian population is equal to that of most majority-Christian countries – excluding just a few big one like USA, Russia, Mexico, Brazil, etc. Buddhists number nearly 50 lakhs. Sikhs, Parsis (Zoorastrians), Bahais, follows their own religion. Iranians, Armenians, Jews, Chinese have come to India – when persecuted in their homelands.

Racism! Anyone?

No, thanks!

India has the Caucasoid stock – spread over the North and West India; Australoid stock spread over South India and the Mongoloid stock spread over of East and North East. There is also a very small sprinkling of the Negroid stock – less than 1%.

The Challenges Ahead

The challenges ahead are defence and economics.

India’s defence unpreparedness is beyond comprehension. Worse, is the lack of threat perception. Indians (sadly and truly) limit their threat perception to the Pakistanis – and the Chinese. with the world’s largest private reserves of gold India becomes a target. The resultant global and emerging threats are unrealised. We spend billions of dollars on buying arms all over the world – but our domestic arms industry is starving.

The second is economics. The world trade systems, financial agreements, currency management continue to drag down India – and many other countries. Navigating these uncharted waters successfully is the other.

And I am sure that another set of new leaders will arrive and take India forward to another level.

Sooner – not later.