“The Dollar: Collapse and Alternative”

When it was announced that countries of the ALBA (Bolivia, Nicaragua, Dominica, Venezuela, Cuba, Honduras) and Ecuador had agreed to establish technical teams to create a monetary zone, starting by promptly implementing a “system of compensation and countable currency,” the international press confirmed the importance and urgency of this “post-Bretton Woods” proposal to inform regarding the escalation and unusual expansion of the systemic crisis that is bringing down U.S., aggravated by deregulation, continual speculation and the opacity of the Treasury, the White House and the Federal Reserve around the Wall Street recovery for more than 700 million dollars.

From the casinos with high finances that play with the U.S. and the world the question is: why rescue Bear Stearns and not Lehman Brothers? Do they carry collateral benefits (bribes), the credit lines offered by the Fed to Mexico and Brazil for 30 million dollars each, to undermine alternatives to the dollar in the region and to the IMF-IDB-World Bank? In the middle of the dollar system’s collapse, the maneuvers of buddies in the center and periphery create bigger disasters with high impact, like the fall of Citigroup (NYT, 22/11/08). Citigroup, with an estimated 2 billion dollars and news feeds, and a figure like Robert Rubin in high posts endorsing scams with Enron, Salinas, Zedillo and Goldman Sachs, it’s an unpleasant memory in Mexico and now also on Wall Street.

For its classicism, the recovery and the legal nationalization of Citigroup contrasted with the reluctance of subsidizing the big three automakers, General Motors (GM) in particular, for the millions of members of the union that would be seen as sacrificed with the liquidation. William Engdahl of the New World Order, author of A Century of War (University of Michigan Press, 2004), says that the fate of Citigroup is as interwoven with other US financiers that they are lost in the chain, according to the IMF, they would be able to reach 1.5 billion dollars, while the credit crisis would have difficulty accessing credit lines- bridge for GM with a multiplied devastating impact that would throw more than 15 million workers out in the street. As noted by Engdahl, this means that “…the recovery of Citigroup and the debacle of GM have confirmed the death of the dollar system.” With the Pentagon, of the American Peace which does not surprise the author that in the recent summit between the European Union and Asiatic countries, official spokesmen of China set out to “de-dollarize” trade between the U.S. and Asian nations.

From here the relevance of the proposal of Ecuadorian President Rafael Correa in the summit to plead that President Chavez’s initiative of a Unified System of Regional Compensation (Sistema Unificado de Compensación Regional -SUCRE) be put into place as part of the regional architecture with three pillars: a developed regional bank, a fund of common international reserves for the region “to count with funds that act as backup in case of a crisis” and “monetary coordination” including mechanisms of reciprocal compensation “and countable currency as a preamble to hard currency.” To mitigate a large impact he urges to join the Sucre of Alba with de-dollarization taking place in Mercosur and in trade between Brazil and Argentina, and apply this agenda by activating the Banco del Sur now.

Combined are the long term effects generated by the corrupt elitists in the United States and the enormity of the hegemonic crisis, in reality there are risks of earthquakes even bigger: with calculations done by D.B. Papadimitriou and L.R. Wray of the Levy Institute on the dimension of the accumulated banking embezzlements in the U.S.- some 2 billion dollars- and regarding the inefficiency of new measures adopted by the Treasury and Federal Reserve, Engdahl warned that “2009 will be a year of titanic collisions and changes in the global order on a scale that was not experimented with in the past five centuries. It is because of this that we need to speak of the end of the American Age and the dollar system.”