Preparation for the post-dollar phase has become a settled matter, as the “world money” as a whole will move to a new formula. The crisis seems to be making this replacement more urgent, as the International Monetary Fund has launched a call for a new Bretton Woods negotiation to reformulate the monetary system, and to move from a dollar-based system to a common system for central digital currencies.

On October 15, 2020, the International Monetary Fund spoke about facing a new Bretton Woods’ moment, following the international discussions that took place in 1944, when 44 of the world leaders joined the negotiations of formulating the International Monetary System; when at the time came out with replacing the gold-based system with a dollar-based system linked to gold, and which determined the other international currencies based on it.

The Moment of Bretton Woods

That moment has entrenched the start of the global dollar domination based on the (American Victory) after WWII, as the US came out with the largest gold reserves, the highest economic growth, the highest military and technological level, the least losses and damages, and the highest readiness level to reconstruct Europe. All that comes objectively as a result, including the advanced state of its currency (USD) and its ability to play a global role while the world needed a (global currency). The Global Dollar system has been formed including a number of institutions and organizations of international monetary and lending management, such as: The International Monetary Fund and the World Bank.  

The international moment in 1944 reflected the end of a battle and negotiations based on a new balance of power; negotiations on one of the most important aspects of “global domination and management” which is “world money”. The International Monetary Fund says today that it is “the new Bretton Woods’ moment”, so are we today at the end of a battle and the start of an international negotiation process based on a change in balance of power?

A Moment of a “Debt and Growth Crisis”

Returning to the statements and declarations regarding this subject, the managing director of the IMF in her speech to the 2020 Annual Meetings, focuses on the fact that this moment results from the size of the international economic crisis. The crisis is primarily related to the Covid19 pandemic (as is the custom in describing the 2020 crisis, while everyone had already anticipated the crisis to explode in 2019-2020 regardless of the epidemic that characterized this expected crisis).  

The Managing Director of the IMF indicates that the global economy will lose at least 4.4% of its value in 2020 and more than $11 trillion, and that poverty will increase globally. Most importantly: she indicates that we are heading towards a long stage of productivity decline, job crisis, decline in incomes and increase in inequality, according to her expressions. The crisis is also related to the huge amount of unpayable debts which reach a threshold of an urgent need for restructuring.

Restructuring Debts

The International Monetary Fund announces that managing debt risk is a fundamental task, whether it is a government or a private sector debt. It is expected for government debt to reach a rate of 125% of the aggregate product of developed countries, 65% of the aggregate product of emerging countries, and 50% of the aggregate product of low-income countries, in addition to the total global debt, which exceeds 350% of the world product.

The IMF says: the grace period for the non-payment of debt that was agreed upon and extended by the G20 (the twenty largest global economies) cannot continue, and that it should be restructured without further delay.

It can be said that the IMF (which is the front institution for governing world money) announces that there will be no growth in the near future, and that global debt should be rearranged in the framework of negotiations for the twenty largest global powers with major intercontinental monetary institutions. In restructuring, there is a creditor and a debtor, a winner and a loser, and a wide rearrangement of global wealth, so this is a suitable moment, indeed, for the West to launch this process before it is too late.

Global economy with its crisis-ridden and fragile state now, is breathing through debt flow, specially the dollar from Western central banks. It is a recovery process that cannot last for long! Therefore, central banks in the West owned by the (global financial oligarchs) want to collect the price of this recovery, and to inherit the legacy of the weakest states, companies, and financial groupings, before the financial flow loses its ability to rescue, i.e. before the dollar bloc loses its value and collapses, and that is why replacing the international currency is one of the fundamental steps.

If debt and the dollar have been the essential strength elements of the Western financial system until now, then this dollar is no longer guaranteed to continue.

Central Digital Currency

If debt and the dollar have been the essential strength elements of the Western financial system until now, then this dollar is no longer guaranteed to continue. The decline of the political, military and technological US hegemony can lead to the collapse of the dollar and collapse of debt with it! Thus, revaluation of debt with “new international currencies” appears to be on the table for rapid implementation.

On October 13, 2020, a report on the Financial Stability Board was issued, which is the International Advisory Board that was established by the G20 in 2009, concerned with monitoring the global financial system. The report announced all efforts regarding international stability currencies GCSs, organizing it and supervising the arrangements of its issuance as a cryptocurrency to be issued by international institutions. The report reflects discussions at the level of major international political and institutional structures: the countries of G20, the managers of major central banks, the International Monetary Fund, the World Bank, and the Bank for International Settlements. It indicates that there is an attempt to find a framework for organizing these currencies and unifying the foundations of its issuance, noting that it may be based on the currently available bloc of international currencies and that the timeframes for forming this framework is no more than two years, and until 2022 the frameworks and tests will be complete.

This announcement was preceded by another meeting of the group of the seven Western central banks with the international institutions themselves to unify the frameworks of forming central digital currencies, and to catch up with the Chinese precedent in this field. In addition to containing private digital currencies including Facebook’s Libra, Bitcoin, and others.  

An Inclusive Political Process

It is a process of redistribution of losses and power centers, and therefore it will involve great conflicts with governments that are financially dependent on the West. They will have to pay for it from their crisis-ridden societies and will eventually get in conflict with them and with economic structures including companies and sectors that may not accept the rearrangement process which the financial sector will try to guarantee for its own interest. The most important and prominent of the new international powers is China; the economically and technologically pioneering, particularly in the field of central digital currencies, and which will not accept the rearrangement of international financial and institutional domination to be in the interest of the West.

The West is trying to impose an early moment of negotiation while it is still in a better position, in terms of benefiting from the function of world money. However, the moment of negotiation is a complicated issue which is not determined by the owners of world money in the West alone, as long as their significance is declining and the significance of others is in progress.