The main cause of her being targeted for political termination, by Far-Left loons and apologists, was her opposition to the idea of an "international reserve currency" to replace the dollar abroad. An idea which was proposed by Chinese central bank governor Zhou Xiaochuan.
Professor Donald Douglas, over at American Power, has taken note in a very observant essay, Michelle Bachman, Saving America, that there is little or no retort from noted conservative bloggers against the cave-dwelling Proglodytes and their lunatic assertions about Bachmann.
Two exceptions on the conservative side are Cornell Law Professor, William A. Jacobson, at Legal Insurrection, who offers an in-depth analysis on the Left's attacks on Bachmann, and a snarky riposte from Mark Harvey of The Snooper Report. Well, I figured this is right up our alley, so why not jump into the mix too.
The real question that remains is whether Bachmann is a dangerous conspiracy theorist occupying a high office? Or is she on point with her observations about the dangers America faces at having the dollar replaced as the international reserve currency?
Besides her congressional grilling of Timothy Geithner and Ben Bernanke, one of the major hangups the Left is having was Bachmann's comments on Glenn Beck's show,
Michelle Bachmann-What that means is that all of the countries of the world would have a single currency. We would give up the dollar as our currency and we would just go with a One World currency. And now for the first time, we’re seeing major countries like China, India, Russia, countries like that, calling for a one world currency and they want this discussion to occur at the G20. So I asked both the Treasury Secretary and the Federal Reserve chair if they would categorically denounce this. The reason why is because if we give up the dollar as our standard, and co-mingle the value of the dollar with the value of coinage in Zimbabwe, that dilutes our money supply. We lose country over our economy. And economic liberty is inextricably entwined with political liberty. Once you lose your economic freedom, you lose your political freedom. And then we are no more, as an exceptional nation, as we always have been. So this is imperative.
If Mr. Xiaochuan's proposal is to be taken seriously and we allow the International Monetary Fund to use the SDR (Special Drawing Rights) the results for America could have long-range negative consequences.
From the Wall Street Journal,
There are a host of other problems that exist with using the SDR's as a replacement for the dollar as the reserve currency also. As pointed out by Ambassador Terry Miller of the Heritage Foundation they range from a lack of intrinsic value, SDR usage will result in a loss of financial transparency, and will lead to new financial complexities and opportunities for corruption.
WSJ-But the main problem with the SDR is that it can't be used for anything in the real world. When the IMF allocates SDRs, recipient countries exchange them for local currencies at local central banks. That money is then used to buy real assets and facilitate trade. That exchange inflates the money supply of the domestic country that's accepting the SDRs in exchange for local currency.
However, one of the more disturbing aspects of the SDR's is the one size fits all for the world's individual economies. Since different economies grow at different paces the value of this new reserve currency would have to regulated by one entity and that is the IMF. An organization which is highly susceptible to the economic and political influence of foreign nations.
As of now, China possesses one the largest holdings of international reserve funds- growing at $400 billion per year- and has been using this to severely undervalue its currency. Thereby gaining a severe financially competitive advantage. China's total holdings of US dollars as reserve currency now total $2 trillion.
Furthermore, China has been financing US debt and deficit spending by purchasing government and agency bonds. Their holdings of US dollars is $1.3 trillion, making China the largest owner of US bonds (debt) in the world. It is in the best interest of the United States to make financial nice-nice with the Chinese since any stoppage on purchases of debt could have disastrous effects on American financial markets and the dollar in particular.
If a new reserve standard is adopted by the IMF, the Chinese could theoretically exert pressure on the IMF to value this new meta-currency in their favor. This would allow them to make monumental economic gains and stabilize their holdings, all the while, depreciating the American economy and causing it to lose its base of power that has been gained by having the dollar set as the international standard.
Is Bachmann a lunatic? Looking at what some of the experts have to say I would say emphatically, "No!" Could she have chosen her words a little more carefully? Yes. Her only mistake was invoking the One World Currency hypothesis. Thereby giving the Far Left loons an opening to characterize her as a nutty religious zealot prophesizing the coming of the Anti-Christ.
It is apparent that devaluing her worth is more important to them than understanding the potential economic threats their country could be facing.One would think that "educated and enlightened " readers of blogs like Think Progress and Fire Dog Lake would at least have the courtesy to over look partisan hackery for the future of their country. I guess I am expecting to much from infants whose nature is woefully self-serving and short sighted.
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