June 3, 2010
“ONE WORLD, ONE MONEY?”
The ANFE (The National Association of Economic Development) and the Central Bank of Costa Rica in a May 27, 2010 press conference announced new legislation being proposed to the Costa Rican Legislative Assembly called “Economy dollarization project for Costa Rica”. If passed, will drop the “colon” as Costa Rica’s currency and replace it with the U.S. dollar.
A number of proposals have been put forward. These include creating a new international financial architecture, instituting capital controls, applying stricter monetary and fiscal policy regimes, and implementing outright dollarization of the economy. Recently this last proposition has drawn significant attention as a potential scenario. But there is much to consider before a country dollarizes its economy.
This was a bold move towards a dollarization of Costa Rica given the fact that there have been many critics apposed to this when the FTA (Free Trade Agreement) was passed including Costa Rica and the U.S. that was signed back in 2009. There were overwhelming concerns that Costa Rica would be required to dollarize in accordance new FTA agreement. Those concerns were met with a document posted on the ANFE website written by the current president of ANFE Jorge Corrales Quesada entitled “Economists Seminar 31” dated August 2007.
It states in the Introduction that, “Digo esto para frenar cualquier intento de tergiversación de los profetas del negativismo, quienes, no me extraña, podrían aseverar que se oponen al TLC, porque éste exige una Costa Rica dolarizada. “
Translated into English: “To clarify, there is nothing in the Free Trade Agreement between Costa Rica, Central America, Dominican Republic and the United States, requiring us to dollarize our economy. I say this to stop any attempt at misrepresentation of the prophets of negativism, who, no wonder, could assert that oppose the FTA, because it requires a dollarized Costa Rica.”
Even though there is major opposition to this issue, it comes as no surprise that the ANFE would introduce this type legislation. Further research into the ANFE indicates the interest to dollarize Costa Rica for many years following in the footsteps of countries like Panama.
In a document showcased on the ANFE website dating back to 2001 entitled “ONE WORLD, ONE MONEY?” by Robert Mundell & Milton Friedman speaks of a move towards a one world currency system. Including an illustration of what the new world currency would look like.
Dollarization is a process in which a country adopts — in whole or in part — the U.S. dollar as its official currency. In a totally dollarized economy, the U.S. dollar is made the only medium of exchange, store of value and unit of account; that country’s national currency ceases to exist. Today, Panama is the only country in Latin America that is totally dollarized; it has been since 1904.
A country that has totally dollarized has eliminated the monetary policymaking role of its central bank. Without a national currency to manage, the country’s monetary policy is, in effect, put into the hands of the Federal Reserve in the United States with no formal input from officials in the dollarized economy.
One of the main reasons for purposely dollarizing an economy is to limit the possibility of high inflation. By dollarizing, a country adopts U.S. monetary policy as its own. As long as U.S. monetary policy is prudently managed, the inflation environment in the dollarized economy should remain subdued.
A history of high inflation and policy volatility are often prevalent in countries that are partially dollarized and are main reasons behind their dollarization in the first place. The high interest rates in such countries reflect inflation expectations and, at the same time, restrain real economic activity. By importing benign U.S. inflation, dollarized economies also import lower interest rates that often closely track U.S. rates.
However, when taking into consideration that the U.S. economy seems to now have a greater risk of hyperinflation than Costa Rica’s economy, leaves much to question. Why the strong push for dollarization now? Could the replacing of the colon with the failing dollar turn out to be the demise of Costa Rica’s relatively strong economy?
VIDEO (spanish)
The timing that this legislation is being introduced should be of great concern to Costa Rica. A time when the U.S. dollar value is in a heavy devaluation period, mainly due to U.S. Government and the U.S. Federal Reserve’s out of control overspending, bloating the national debt exponentially. A time that the U.S. economy is looking more and more like it’s heading into the worst depression ever. At a time of multiple perpetual wars in the Middle East pushing the U.S. economy to the brink with a spending budget of over $1 trillion dollars a year.
Every economist knows that high rates of inflation and hyperinflation are created through excessive growth of the money supply. The consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.
Dollar devaluation & hyperinflation will eventually destroy the U.S. if it continues to overgrow its government and dilute the money supply. Undoubtedly, crippling any other country that currently holds the U.S. currency in mass reserves and/or is dollarized. Costa Rica could fall into the same trap as most other 3rd world countries have, mainly due to ignorance, greed and power. So why would Costa Rica even consider getting onboard a seemingly sinking ship?
It is now painfully obvious that the New World Order has now officially reached the shores of Costa Rica, possibly making them the newest into a long line of victims. Infiltration, manipulation, bribing, or more probable political bamboozling has infected the ANFE and the Central Bank of Costa Rica into taking part in the pursuit of a New World Order.
No matter how big or small the Nation, it seems that the powers that be will not allow anyone to slip through the cracks unscathed when the U.S. dollar and Euro inevitably collapse. That would spoil plans to swindle the world into believing that we need a one-world currency, controlled by one international government. Is it such a good idea for one central banking cartel to control the world’s money supply and the entire worlds economy? When you control a country’s currency and money supply (CREDIT), you control that country and it’s citizens.
Costa Rica is one of the few countries that do not currently have an overwhelming national debt. They might have just been able to avoid the utter turmoil that is now facing countries like Greece. The colon may have proven resilient against the upcoming collapse of the U.S. Dollar, Euro and others. If this legislation goes through, we may never know.
Welcome to the New World Order Costa Rica!
