Thursday, January 6, 2011

World Bank and China

In April, 2010, US Treasure Secretary Geithner said that they (the members of World Bank) had altered the shareholding formula and decided to re-capitalize the bank by issuing more bonds. (http://www.reuters.com/article/idUSWEQOO390120100425 )


He also said that the United States, which holds the largest voting share in the World Bank at 16.4 percent, would not seek any increase for itself under a revised voting formula that is to better reflect developing countries' economic heft.

"Because we believe this overall outcome merits our strong endorsement, the United States agreed not to take up its full shareholding in this new arrangement," Geithner said. (http://www.reuters.com/article/idUSWEQOO390120100425 )

The five Executive Directors are appointed by the members with the five largest numbers of shares (currently the United States, Japan, Germany, France and the United Kingdom).

Just why did the U.S. decide to take less of the votes? To give more voting power to nations that don’t have as big of an interest it. I.e. They get to vote how other people spend their money. Nice.

And just how did the World Bank (the U.S.) decide to recapitalize (get more money into the bank)? They are following McDonald’s and Caterpillar’s (did you know Caterpillar got a HUGE bailout?) lead. Global companies and institutions such as the Asian Development Bank, McDonald's Corp and Caterpillar have all issued yuan bonds. They are already giving up on the dollar. The U.S. government is following suit.

Read today’s article:

• World Bank's first yuan bond promotes Chinese currency's ...

The World Bank China Office said Wednesday the World Bank has priced 500 million yuan (76 million US dollars) of RMB-denominated fixed-rate two-year bonds ...

And what does the U.S. not taking it’s votes combined with issuing 500 yuan mean??? It means CHINA will now become the 3rd highest voting member of World Bank, after U.S and Japan. They will leap frog over Germany, France and England. I wonder who is buying those bonds? My bet is on the U.S. treasury- along with McDonald’s and Caterpillar.

What does that mean? It means the Dollar is in demise. It means the Yuan in on the rise and it has the blessing of the US. Why does Obama (he controls Geithner) want the Yuan to succeed and the Dollar to fail??? Why would we give up voting rights to China? Is it a slap in the face to Germany, France and the UK? Or, are they buying the bonds along with the US? Did you know that China just agreed to bail out Spain’s debt? I bet they are buying the debt in yuan. What a great way to promote their currency- they are giving it away!

On 23 November 2010, at a meeting of the Russian Prime Minister Vladimir Putin and the Chinese Premier Wen Jiabao, it was announced that Russia and China have decided to use their own national currencies for bilateral trade, instead of the U.S. dollar.

The evidence indicating that our government believes that the dollar is done for and they are getting ready to jump ship. They are diversifying into the new world currency- the Yuan. Curious that our socialist president is moving toward a socialist currency. Did you know Mao’s face is on the 1, 5,10, 20, 50, and 100 yuan note?

Chinese takeout anyone? I’m hungry.

2 comments:

Tyler Bushman said...

I've been worried about this for a while. I'm just hoping that the dollar does what it always does and bounces back. The difference now between today and the last 100 years is that now the U.S. isn't necessarily the world economic leader anymore.

Jimmy the Screwdriver said...

Tyler, for now the U.S. is still the world economic leader. China however, is the fastest growing.

I suggest that to protect your weath, that you follow the Alpha Strategy. (available for download from my Free-ebooks link OR on the CDROM library I just started selling for $10).

The strategy is to purchase now what durable goods you will need in the future. That way you can buy at today's prices instead of tomorrow's inflated ones.

To preserve your wealth, buy gold and silver and other tangible items of durable value(after you have laid up your food storage, guns and bandaids). I'm looking at purchasing some retreat property this weekend- that will always have value.