The Coming Global Financial Revolution

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“Ethical Markets recommends this deeply-researched article “The Coming Global Financial Revolution”, in which our esteemed Advisory Board member,  Ellen H. Brown provides her view of  historical background of the past century of domination of global fossilized energy and monetary games in which they designed themselves winners. Both now fuel climate disasters and the horrific attack by Putin on its peaceful Ukrainian neighbor, contrary to the United Nations (UN) Charter and the loss of so many innocent lives.

We agree with Ellen Brown that this global system controlling human activities by weaponizing global markets is now in its final death throes.

These patriarchal global elites assumed their hegemony was invincible and that all their attendant macroeconomic statistics justifying this system, all derived from prices, would remain the dominant classification of “development and “ growth”.   All this is failing because prices are a function of human ignorance, allowing accounting frauds and denial of responsibility as “externalities”, as we detailed in “Ending Externalities; Toward Full-Spectrum Accounting“ (2016). Today, no one knows the price of anything, as new “asset classes“ are created by marketers and speculators out of thin air, as we document!

The global systemic breakdowns caused by this formerly-dominant economic and financial approach is now widely challenged as investors seek wider data not taught in economics classrooms from other scientific domains: biology, ecology, anthropology and physics, particularly in thermodynamic calculation of rates of entropy-creation.

We point all this out in “Economists Learning From Futurists” and how economic forecasting was such a dismal failure that many groups including the Task Force on Climate-Related Disclosure (TFCD)  now require scenarios be utilized, developed over decades by the futurist profession, including  Ethical Markets 40  years or futures research on alternatives to economics.

So our futurist focus is on widening the range of policy choices worldwide in all sectors, while also pointing out that all price-based data is historic, so it backs its users into the future looking through the rearview mirror.

See all our scenarios of more positive, knowledge-richer, cleaner, greener more inclusive, and shared common futures in my two books “Creating Alternative Futures (1978,1996) and “The Politics of the Solar Age” (1981,1988).  Both are free downloads as well as my articles, which clarify that we can shift rapidly to Solar Age technologies now in “Dawn of a New Era”.

~Hazel Henderson, Editor“

The Coming Global Financial Revolution: Russia Is Following the American Playbook

No country has successfully challenged the U.S. dollar’s global hegemony—until now. How did this happen and what will it mean?

Foreign critics have long chafed at the “exorbitant privilege” of the U.S. dollar as global reserve currency. The U.S. can issue this currency backed by nothing but the “full faith and credit of the United States.” Foreign governments, needing dollars, not only accept them in trade but buy U.S. securities with them, effectively funding the U.S. government and its foreign wars. But no government has been powerful enough to break that arrangement – until now. How did that happen and what will it mean for the U.S. and global economies?

The Rise and Fall of the PetroDollar

First, some history: The U.S. dollar was adopted as the global reserve currency at the Bretton Woods Conference in 1944, when the dollar was still backed by gold on global markets. The agreement was that gold and the dollar would be accepted interchangeably as global reserves, the dollars to be redeemable in gold on demand at $35 an ounce. Exchange rates of other currencies were fixed against the dollar.

But that deal was broken after President Lyndon Johnson’s “guns and butter” policy exhausted the U.S. kitty by funding war in Vietnam along with his “Great Society” social programs at home. French President Charles de Gaulle, suspecting the U.S. was running out of money, cashed in a major portion of France’s dollars for gold and threatened to cash in the rest; and other countries followed suit or threatened to.

In 1971, President Richard Nixon ended the convertibility of the dollar to gold internationally (known as “closing the gold window”), in order to avoid draining U.S. gold reserves. The value of the dollar then plummeted relative to other currencies on global exchanges. To prop it up, Nixon and Secretary of State Henry Kissinger made a deal with Saudi Arabia and the OPEC countries that OPEC would sell oil only in dollars, and that the dollars would be deposited in Wall Street and City of London banks. In return, the U.S. would defend the OPEC countries militarily. Economic researcher William Engdahl also presents evidence of a promise that the price of oil would be quadrupled. An oil crisis triggered by a brief Middle Eastern war did cause the price of oil to quadruple, and the OPEC agreement was finalized in 1974.

The deal held firm until 2000, when Saddam Hussein broke it by selling Iraqi oil in euros. Libyan president Omar Qaddafi followed suit. Both presidents wound up assassinated, and their countries were decimated in war with the United States. Canadian researcher Matthew Ehret observes:

We should not forget that the Sudan-Libya-Egypt alliance under the combined leadership of Mubarak, Qadhafi and Bashir, had moved to establish a new gold-backed financial system outside of the IMF/World Bank to fund large scale development in Africa. Had this program not been undermined by a NATO-led destruction of Libya, the carving up of Sudan and regime change in Egypt, then the world would have seen the emergence of a major regional block of African states shaping their own destinies outside of the rigged game of Anglo-American controlled finance for the first time in history.

The Rise of the PetroRuble

The first challenge by a major power to what became known as the petrodollar has come in 2022. In the month after the Ukraine conflict began, the U.S. and its European allies imposed heavy financial sanctions on Russia in response to the illegal military invasion. The Western measures included freezing nearly half of the Russian central bank’s 640 billion U.S. dollars in financial reserves, expelling several of Russia’s largest banks from the SWIFT global payment system, imposing export controls aimed at limiting Russia’s access to advanced technologies, closing down their airspace and ports to Russian planes and ships, and instituting personal sanctions against senior Russian officials and high-profile tycoons. Worried Russians rushed to withdraw rubles from their banks, and the value of the ruble plunged on global markets just as the U.S. dollar had in the early 1970s.

The trust placed in the U.S. dollar as global reserve currency, backed by “the full faith and credit of the United States,” had finally been fully broken. Russian President Vladimir Putin said in a speech on March 16 that the U.S. and EU had defaulted on their obligations, and that freezing Russia’s reserves marks the end of the reliability of so-called first class assets. On March 23, Putin announced that Russia’s natural gas would be sold to “unfriendly countries” only in Russian rubles, rather than the euros or dollars currently used. Forty-eight nations are counted by Russia as “unfriendly,” including the United States, Britain, Ukraine, Switzerland, South Korea, Singapore, Norway, Canada and Japan.  Continue reading