BEIJING (Reuters) - Threatened by a “financial tsunami,” the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.
The commentary in the overseas edition of the People’s Daily said the collapse of Lehman Brothers Holdings Inc LEH.P “may augur an even larger impending global ‘financial tsunami’.”
“World, hold on. Instead of messing with our future, open up inside.” — Bob Sinclair
NEW YORK (MarketWatch) — Thomas Jefferson once said: “When you reach the end of your rope, tie a knot in it and hang on.” As the global financial system pushes on a string, investors are desperately trying to hold tight.
The New World Order is upon us, full of hope, promise and a fair amount of fear. In our recent discussion regarding the direction of our country, we noted the risks of catering to conventional wisdom and the implications for the U.S. dollar. See MarketWatch column on New World Order.
Before the euro was introduced most European countries had their own coins and banknotes – their own currency.
[Selection of 20th century currencies]
For travel and trade, it was necessary to change money as you changed country. In Germany you paid in Deutschmarks, if you left Germany and travelled to France you had to exchange your Deutschmarks for French Francs, and so on.
The names of Europe’s old currencies often revealed something about their origins:
Apart from the few universities that enjoy the guaranteed big payouts, it is almost impossible to find anyone who is completely satisfied with the Bowl Championship Series in American college football - and not much easier to find anyone who even understands how it works.
Statistically, the system is such an abomination that at least one expert - Hal Stern, a professor of statistics at the University of California, Irvine - advocated that no self-respecting statistician should have anything to do with it.
Hard evidence comes from a further series of audits and reports carried out by the office of the CPA’s own inspector general (CPA-IG). Set up in January 2004, it reported to Congress. Its auditors, accountants and criminal investigators often found themselves sitting alone at cafeteria tables in the Green Zone, shunned by their compatriots. Their audit, published in July 2004, found that the American contracts officers in the CPA and the Iraqi ministries ‘did not ensure that . . . contract files contained all the required documents, a fair and reasonable price was paid for the services received, contractors were capable of meeting delivery schedules, or that contractors were paid in accordance with contract requirements’.
On 12 April 2004, the Coalition Provisional Authority in Erbil in northern Iraq handed over $1.5 billion in cash to a local courier. The money, fresh $100 bills shrink-wrapped on pallets, which filled three Blackhawk helicopters, came from oil sales under the UN’s Oil for Food Programme, and had been entrusted by the UN Security Council to the Americans to be spent on behalf of the Iraqi people. The CPA didn’t properly check out the courier before handing over the cash, and, as a result, according to an audit report by the CPA’s inspector general, ‘there was an increased risk of the loss or theft of the cash.’ Paul Bremer, the American pro-consul in Baghdad until June last year, kept a slush fund of nearly $600 million cash for which there is no paperwork: $200 million of this was kept in a room in one of Saddam’s former palaces, and the US soldier in charge used to keep the key to the room in his backpack, which he left on his desk when he popped out for lunch. Again, this is Iraqi money, not US funds.
Bills are worth more than the coins you have learned about. There are many bills of different values. It is easy to see how much a bill is worth because the amount of the bill appears as a big number in each corner on both sides.
One-Dollar Bill
One dollar is the same as one hundred pennies or 100 cents. The symbol for a dollar is “$”. You write one dollar as $1. Notice that you write the cent sign after the number, as in 1¢, and you write the dollar sign before the number, as in $1. Here is a picture of a one-dollar bill:
In a fiat money system, money is not backed by a physical commodity (i.e.: gold). Instead, the only thing that gives the money value is its relative scarcity and the faith placed in it by the people that use it. A good primer on the history of fiat money in the US can be found in a video provided by the Mises.org website.
In a fiat monetary system, there is no restrain on the amount of money that can be created. This allows unlimited credit creation. Initially, a rapid growth in the availability of credit is often mistaken for economic growth, as spending and business profits grow and frequently there is a rapid growth in equity prices. In the long run, however, the economy tends to suffer much more by the following contraction than it gained from the expansion in credit. This expansion in credit can be seen in the Debt/GDP ratio. We track the bubbles created by this expansion of debt at the inflation / deflation page.
“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.”
President James Madison
Money, money, money, it’s always just been there, right? Wrong.
Obviously it’s issued by the government to make it easy for us to exchange things. Wrong again!
Tell someone you are going to a convention of accountants and you might get a few yawns, yet money and how it works is probably one of the most interesting things on earth.
It is fascinating and almost magical how money appeared on our planet. Unlike most developments we enjoy, which can be traced back to a source, civilisation or inventor, money appeared in places then unconnected all over the world in a remarkably simular way.