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Sunday, 26 June 2011 16:39

Dollar Demise: Prophetic Significance of a One-World Currency

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On August 7, 2009 a significant event occurred. Did you miss it? On that day, the International Monetary Fund (IMF) voted to increase the supply of SDRs by $250 billion. Shortly thereafter, on August 28, these SDRs were issued and redistributed to the 186 member countries of the IMF. What was so noteworthy about this? And, just what are SDRs?


On August 7, 2009 a significant event occurred. Did you miss it? On that day, the International Monetary Fund (IMF) voted to increase the supply of SDRs by $250 billion. Shortly thereafter, on August 28, these SDRs were issued and redistributed to the 186 member countries of the IMF. What was so noteworthy about this? And, just what are SDRs?


 



Well, to begin, we should start with identifying the IMF’s role in the world. Quoting its website: “The IMF promotes international monetary cooperation and exchange rate stability, facilitates the balanced growth of international trade, and provides resources to help members in balance of payments difficulties or to assist with poverty reduction.”1 This mission should cause us to sit up and take notice. This organization is one of the most influential in driving global financial and economic convergence. Bible readers know that since these are sub-trends of globalization and globalism, that therefore we are dealing with a topic of prophetic significance.



But what is an SDR? It is an accounting
unit for the financial reserves of the
IMF, and stands for Special Drawing
Right. It serves as a type of currency for
this transnational organization and its
members. Technically, the SDR is not a
real currency, as it cannot be spent in the
marketplace. For example, today you
cannot take an SDR coin and buy a coffee
in a café in Brussels. All the same, as this
accounting unit is defined as a basket of underlying currencies (the US dollar
makes up about 44% of its value) it does
carry real financial clout.



Due to the SDR’s rather specialized and
obscure role, most people would not
know that it has already functioned as a
global monetary unit since its inception
back in 1969. The recent issue of SDRs is
the first in almost 3 decades (1981) …
representing somewhat of an awakening.
What is also significant is that this allocation
has boosted the amount of SDRs by
7.5 times. Could an ascendant SDR someday
dethrone the US dollar? What role
will it play in a developing one-world
currency? We want to address these urgent
questions.


Move Over Dollar



Interestingly, the IMF’s new SDR issue
has not caught the full attention of those
who believe the world will soon have
one-world currency. That may be due to
the fact that the total value of SDRs still
only represents a fraction of total world
currency reserves (less than 1%), or that
they are neither visible nor understood.
Usually, every time an event occurs that
could be construed as a step toward a
one-world currency, one can expect a
stream of hysterical reports and speculations.
We will yet come back to address
the legitimacy of “one-world currency”
fears.



For now, keeping to our line of inquiry,
any discussion of significant shifts in
global reserve-currency supremacy must
involve implications for the US dollar. In
order for a one-world currency to emerge,
we must also presume that the US dollar
is on the wane and will be removed. Let’s
then deal with this possibility first. It certainly
is true that the US dollar is suffering
an “image” problem today, as some
analysts have put it. After about six
decades as the world’s main reserve
currency, many key nations have
been intensifying their complaints
that the US dollar is no longer suitable
or worthy. The BRIC countries
(Brazil, Russia, India and China)
have most brazenly been calling for
a new global reserve currency.



China would dearly like its currency
(the yuan) to play a role as a
world reserve currency. It is the
country that stands to lose the most
should the US dollar falter, since it
has accumulated large official holdings of
US-dollar assets. Recently, the Economist
magazine presented a picture of the dollar
symbol morphing into a dragon. The implication
was that the world would some
day be moving to a yuan standard. Could
this happen? We will yet provide our
opinion.



With respect to the dollar, even some
prominent American economists are of
the view that the U.S.’s role in world capital
markets is on the wane. Quoting
Joseph Stiglitz, a respected academic and
former Chief Economist of the World
Bank, “To be sure, our influence will diminish,
as we are less likely to be held up
as a role model, but that was happening
in any case. America used to play a pivotal
role in global capital, because others
believed that we had a special talent for
managing risk and allocating financial resources.
No one thinks that now, and
Asia—where much of the world’s saving occurs today—is already developing its
own financial centers. We are no longer
the chief source of capital. The world’s
top three banks are now Chinese. America’s
largest bank is down at the No. 5
spot.”2



The U.S. dollar position as the major
reserve currency is clearly under attack. It
is true that US financial policies have often
been criticized over the years, and
sometimes without merit. Either the dollar
was considered too high in value (i.e.
a situation which led to the Plaza
Accord of 1985) or too low
(i.e. in recent years versus
the Euro). But lately,
complaints have had
more to do with
the huge international
indebtedness
of the U.S.
and its reckless
monetary policies.



Recent financial developments and
geopolitical shifts likely signify a critical
turning point for the dollar. Therefore,
could U.S. currency trends of late be
prophetically significant?



We provide answers to our questions
first from a Biblical response, and then
from a contemporary economic perspective.
Let’s therefore examine the prophetic
view next.


Prophetic Views on Currencies?



It must certainly be recognized at this
stage of world history that any major and
sudden development is likely to be
prophetically significant … especially so
were it also to impinge upon Israel in
some way or lead to a new consolidated
global power structure centered around
10 countries. One of the most important
markers of the endtimes has already been
triggered—Israel has been reborn. If the
US dollar were to topple suddenly, it most
assuredly would be a development that
hastens the arrival of endtime prophetic
conditions.



But would that mean that a one world
currency is in the offing? This
is possible…but not certain
… or even highly likely.
Many Bible prophecy scholars
treat the one-world currency
notion as if it were
specific literal prophecy.
It is not. Rather, it is a
deduction. That is not
to say that it would
represent unreasonable
conjecture. However, if
we stick to what the
Bible actually says, the
correct and supportable response
must be that a oneworld
currency cannot be
either proven or disproved
from the Bible. Scripture is
silent on this specific idea.



What is clearly prophesied are the conditions
of global convergence in commerce,
politics and beliefs (i.e. religion).
Midnight Call has carried numerous articles
documenting these assertions biblically,
especially in relation to
globalization and globalism. (See this column
in MCM May though August 2007).



That said, we still cannot prove that
there will be a single, fungible world currency.
Actually, we may be wasting our
time being on the lookout for a oneworld
currency. It is not required to fulfill
prophecy. Consider that while ecumenicism
may ultimately achieve a one-world
religious convergence—one big happy
family of diverse religions that tolerate
each other and ignore mutual inconsistencies—
that this would not require individual
religions to lose their independent
identities. Likewise so in the financial
world. One can have a one-world financial
system that reflects similar protocols and conventions, but many individual
currencies.


Tiring Speculations Without Sure
Conclusions



I admit that I sometimes get a little
tired of all the one-world currency speculations
and sensationalizations. As someone
who has worked on the frontlines of
global money for almost three decades, to
me the whole question denies the reality
of what already has unfolded. A one-world
capital market already exists. A
one-world trading system of goods and
services—though there is room for much
more convergence—can also be said to
have arrived. It is these developments
that the Bible specifically
prophesies … and not a
one-world currency.



We have made the
point frequently in our
writings that the world’s
capital markets are already
on a de facto “one
currency” standard. Professional
money traders
who work inside this
system fully appreciate
this state of affairs.
Money moves fluidly
across currencies around
the world in the trillions.
Sophisticated financial
hedging instruments exist
that in essence give
security and mobility to global money.
We acknowledge that there are more individual
currencies in the world today than
there were 20 and 50 years ago. Yet, this
trend has not stopped global monetary
convergence. Far from it.



So, when I get breathless questions
about the Amero (a proposed American
currency union), the khaliji (proposed,
but currently sidelined currency for six
Middle East countries), the Asian single
currency project that has been accelerated…
etc., I can’t help but feel that we
are missing the forest for the trees. Yes,
these currency unifications can and may
very well move forward. But so what? It is
much too late to become a monetary “single-
currency” alarmist, and what would it
accomplish in any case? Let’s wake up
and pursue questions that are more relevant
and practical, as we will note in the
conclusions.


Contemporary Analysis of Future
Currency Shifts



What is the economic case for a oneworld
currency? There would be both advantages
and disadvantages. On balance,
in the multi-polar
world system that is
developing today—
one that is no longer
likely to be anchored
by one superpower—
it would
seem improbable
that sufficient unanimity
for such a
development is on
the near-term horizon.
Of course, were
a massive world financial
crisis to
erupt—one much,
much bigger than
the current Global
Financial Crisis
(GFC)—and a strong leader emerge who
is influential and flattering enough to
successfully force world consensus on
such a question, conditions for the formation
of a one-world currency would be
more conducive.



But we need not preoccupy ourselves
with this scenario. It would be a development
involving the Antichrist that occurs
inside the Tribulation period, and does
not concern us today. Now, the more obvious outcome is that the world will
move to a multi-currency reserve platform.
Such a regime would be more in
alignment with the Bible’s indications. After
all, Scripture tells us that first a multipolar
coalition of nations will develop,
shown as 10 separate countries (the “10
kings”). (See Daniel 2, 7 and Revelation
12, 13, and 17, which speak of 10 toes, 10
horns and 10 kings.)



A number of currencies together are
therefore likely to supplant the US dollar’s
lone reserve role in the world. The euro,
yen and eventually perhaps the Chinese
yuan, Russian ruble, Brazilian real and
others could play a part. This is why the
IMF’s SDR is likely to become much more
important in the future. It is an inclusive
financial structure, ideally suited to a
multipolar world. Though it is not a real
currency itself, it yet facilitates power
sharing and the mobilization of global
money.


Thoughts to Ponder



With respect to the outlook for the US
dollar that is cherished by so many, here
is a fact that you may not have known: It
was recognized long, long ago—in fact,
right at the inception of the world’s current
monetary regime—that the US dollar
was fated to lose its central reserve role.
Its eventual fall was anticipated by the
very architects of the Bretton Woods system.
(An important paper written by
Robert Triffin in 1960 clearly underlined
this conclusion.)



In order to provide the currency backbone
to the world, the U.S. needed to run
deficits (supplying US dollars to the rest
of the world.) But this can be done only
so long before mounting international
debts would overwhelm the U.S. Indeed,
in part, this is what has happened.



The bottom line? After 60 years of
serving as the world’s reserve currency,
the globe is swamped with US dollars.
(Consider that some 70 percent of dollars
in circulation are held outside the U.S.!)
Even should a major currency crisis be
avoided, it only stands to reason that the
US dollar will continue to decline in influence.
That could yet take a long time;
or it may not.



As Christians, however, it is crucial
that we not get distracted from the reality
of what is unfolding. We should avoid
fixations with misleading indicators and
our hobbyhorse prophetic theories when
they cannot be proven from the Bible. We
need to keep watching … and learning.
Jesus Christ implored the disciples many
times to watch … at least nine times!



The one-world financial system is already
here … the endtime money snare
virtually complete. The more important
questions are these: Just how can we remain
separate and holy from the rampant
religion of Mammonism that is enveloping
the world today? How best can we be
used in the task of snatching people from
the fire?



Jude summarizes these directives, saying:




“Be merciful to those who doubt;
snatch others from the fire and save them;
to others show mercy, mixed with fear—
hating even the clothing stained by corrupted
flesh (Jude 1:22-23).




There are initiatives in which Christians
can safely be activists: Snatching
people from the fire and hating the corruption
of the flesh.



Maranatha! Oh, Lord, steel our resolve
and equip us to do so in these “perilous”
times (2 Timothy 3:1).



ENDNOTES



1. International Monetary Fund,
http://www.imf.org/external/about/overview.htm.
Accessed July 25, 2009.

2. Joseph Stiglitz,“Wall Street’s Toxic Message,”Vanity
Fair
, June 11, 2009.

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Wilfred Hahn

Wilfred Hahn is a global economist/strategist. Formerly a top-ranked global analyst and one-time head of a large global investment company with worldwide operations, his writings focus on the endtime roles of money, economics and globalization. He has been quoted around the world and his writings reproduced in numerous other publications and languages.

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