The World Is Screaming For A New Financial System

Submitted by Tyler Durden on 03/14/2014 18:27 -0400

Submitted by Simon Black of Sovereign Man blog,  One of the key lessons we can take away from history is that the global financial system changes… frequently.
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In ancient times, Roman coins were used across the region by Romans and non-Romans alike who engaged in trade and commerce.

Given how destructively successive Roman governments debased their coins, however, the reserve burden eventually fell to the Byzantine Empire, whose gold solidus coin became the dominant currency in world trade.

Over the centuries, this standard changed several more times. The Venetians, Florentines, Spanish, French, British, etc. each issued the world’s dominant currency at one point or another.

But the fundamentals of those currencies changed. Governments engaged in wanton debasement, mismanaged their economies, and accumulated massive debt levels. And eventually the world shifted to new currencies.

Since the end of World War II, the US dollar has been the dominant currency in the world.

And even though Richard Nixon ended the dollar’s convertability to gold and unilaterally abandoned the US government’s obligations under the Bretton Woods system back in 1971, the world has still clung to the dollar for the past 43-years.

But this is changing rapidly.

The Chinese, which have their own economic issues to deal with, are starting to dump Treasuries in record numbers.

Central banks are buying up more gold. Foreign countries are entering into bilateral currency swap arrangements with one another. And world governments are starting to (rather embarrassingly) demand that the US get its budget and fiscal house in order.

Most tellingly, though, member nations of the International Monetary Fund are starting to revolt.

As one of the major organizations spawned from the post-war financial structure, the IMF’s original goal was to ensure the smooth development of a new global financial system.

Over 180 countries have since become members of the IMF. But the organization runs on a quota system, with each member nation having a certain percentage of the IMF’s overall votes.

The US, for example, has the most power by far with a 16.75% share of the vote. Japan is a distant second with a 6.23% share.

This puts the US in the driver’s seat. And it’s been that way for decades.

But most of the other 180+ nations have had enough. And they’re pushing the United States to massively overhaul the current quota system.

Even typical allies are breaking ranks. Australian Treasurer Joe Hockey recently told reporters at a financial conference that they will “actively lobby” the US to reform the IMF quota issues, and that “Congress must understand that it is in the interest of the US to reform the IMF. . .”

India. China. Just about everyone imaginable is pushing for major IMF reform. Everyone except the Land of the Free. The US government seems to like things the way they are. And Congress has been very intransigent in adopting any planned reforms.

These people have their heads buried in the sand so deep that they can’t even hear the rest of the world SCREAMING for a new financial system.

This is going to happen, whether the US wants it to or not.

And while no foreign government wants a collapse of the dollar, they do very much want an orderly rebalancing of the financial system. This is already under way.

The US government may pretend that everything is fine and dandy. But given the overwhelming objective evidence out there, folks who aren’t on board with this major trend are ignoring it at their own peril.

http://www.zerohedge.com/news/2014-03-14/world-screaming-new-financial-system