World Currencies Currently most—if not all—currencies are directly pegged to the US dollar with the governance of a monetary standard. The variance in the effects of inflationary pressure—when compared to the US dollar—is due to their value (purchasing power) and their central banks' monetary policies. Today we have reports concerning the rise in value of various currencies when compared to the US dollar. For the most part, this is due to the US dollar's rate of descent due to its central bank's failure to raise the Fed Fund rate which would give some balance to its devilish inflationary monetary policy.

1. Report Completed: 22 August 2011
In the Name of Allah the Beneficent the Merciful
Topic: Currency Report 2011
The US Dollar
The US dollar is falling in value as its debts increase, expenditures increase, and the
Federal Reserve so-called Quantitative Easing (QE) experiments only prove to further punish the
survivors of the so-called World Financial Crisis/Credit Crunch with the inability to preserve and
grow hard-won capital. The main cause of the dollars decline is the “blatant disrespect” of the
natural inverse relationship between the value and the interest-rate of bonds—which is a debt
issue—as all fiat bills are. Inflation began on 25 March 2009 when the US central bank decided
to “buy” at least US $100B worth of Treasury bonds.
(http://www.federalreserve.gov/newsevents/press/monetary/20090318a.htm) As I warned in a
letter I wrote to Latin American governments and some Southern African governments, food
prices would rise on a global scale, and prices across the board will also rise due to inflationary
pressure. I had also wrote in that letter that this would be done in an incremental sequence in
order to give the impression that we were still in a deflationary period, although we were in the
beginning stages of a period of inflation. Evidence of this is in the R & A section of the company
website: http://www.mge19.com under the title “Warning to Latin American Governments”.
The “disrespect” as pointed out earlier is simply this:
When the value of the bond goes up; the interest rate falls.
When the value of the bond goes down; the interest rate rises.
All bonds are an issuance of debt. The fiat bill has no commodity-backed standard and is
supported by the economic activity of a nation which is rooted in debt. Hence, the fiat currency is
functionally an issuance of debt and operate from this inverse law of bonds.

2. Understanding this will help one to see why economic growth and activity in the US and globally
have been sluggish and overbearing. Once the US central bank implemented its “Quantitative
Easing” experiments—which is adding liquidity into the global markets by “purchasing Treasury
bonds”--it decided to lower interest rates via the infamous “Fed Fund rate”. When there is more
liquidity than what the economy demands, prices rise because the value of the currency
diminishes. If this is the case, then why would they lower the interest rate? This is the disrespect
of the inverse law of bonds that I spoke about.
The reason why economic activity has slowed in spite of rising prices is because if interest
rates are low and the value of the currency is diminishing, why would any right-thinking bank
distribute capital? They will receive back currency with diminishing value at virtually-free rates.
This will literally “break the banks”. Contrary to popular belief, banks are risk-adverse by
nature.
Most companies borrow from banks in order to retain their earnings and profits. If a
company were to use its earnings for investment in its own expansion, then their earnings and
profit margins would diminish because those profits and earnings would then be categorized as
“capital”. This would have a significant impact on stock prices. Most companies prefer to
borrow from banks in order to expand their business.
With prices increasing, economic growth has been taking place since 25 March 2009;
albeit at a slow pace. As I have warned before, if inflationary pressure is allowed to continue
unbridled, then costs will catch up with revenue-generation. This will slow down economic
growth significantly. This coupled with near-zero interest rates will bring economic growth to a
grinding halt. This explains why employment levels have not increased significantly. This also
explains why many companies and banks are still struggling.
Most banks make investments and distribute loans for revenue-generation and growth
purposes. With diminishing currency value and near-zero interest-rate levels, banks are
reluctant to distribute capital. In fact, due to the so-called Credit Crunch, most banks are cash-
strapped themselves—seeking to raise capital. The tough regulations now imposed on many
banks are punishing them for surviving the so-called World Financial Crisis with the little capital
they have left. This forces the banks to rely on their investments for growth. However, the new
regulations limits the level of risk they are able to take. This positions these banks to take on less
risk which means less prospects for growth. Growth levels for banks will be significantly
diminished. This will prove detrimental to banks—especially smaller retail and community
banks.
Companies who rely on banks for capital must look to other sources for capital. This
includes investment banks, private equity firms, and other investment companies. The scarcity
of capital (distribution) mixed with increasing cost-levels position many companies that lack
large liquid capital margins for buy-out status. This is evident in today's economy where bigger
banks and bigger companies are buying out many of their smaller counterparts.
Even with this level of corporate and banking consolidation, the
increasing inflationary pressure with the maintenance of near-zero interest-rate levels will bring

3. economic activity to a grinding halt.
What does this mean? Since the fiat currency is supported by the economic activity of a nation
which is rooted in debt and is not backed by a monetized commodity, if inflation is allowed to
continue with interest rates near-zero, the US dollar will collapse—as well as all currencies that
are still directly pegged to the US dollar. This includes the Chinese yuan and Japanese yin. It
appears this may well be the case since it has been reported that US central bank will maintain its
near-zero interest rate level until FY2013. It has also been reported that they may add more
liquidity through its so-called Quantitative Easing experiments. This will only prove to collapse
the dollar further. ( http://www.federalreserve.gov/newsevents/press/monetary/20110809a.htm )
Considering that interest rates will remain at its current status until FY2013 at the earliest, this
will prove to be the longest inflationary period in the history of the US. The day that the US
central bank decides to raise interest rates will be the day that they are planning to reverse
inflation and implement deflationary pressure—continuing to disrespect the inverse law of
bonds. However, I serious doubt this will occur. I believe the goal is to deliberately collapse
world economies through their currencies in order to justify implementing an artificially-
imposed global currency in which the IMF's Special Drawing Rights are the prototype of. That's
another analysis however.
World Currencies
Currently most—if not all—currencies are directly pegged to the US dollar with the
governance of a monetary standard. The variance in the effects of inflationary pressure—when
compared to the US dollar—is due to their value (purchasing power) and their central banks'
monetary policies. Today we have reports concerning the rise in value of various currencies
when compared to the US dollar. For the most part, this is due to the US dollar's rate of descent
due to its central bank's failure to raise the Fed Fund rate which would give some balance to its
devilish inflationary monetary policy.
Currency: China Yuan
Central Bank Monetary Policy: The People's Bank of China, from 7 July 2011 from financial
institutions raised benchmark deposit and lending rates by 0.25 percentage points, other deposit
and lending rates and personal housing accumulation fund loan interest rate is adjusted
accordingly.
See more at : China's Monetary Policy 7 July 2011
Exchange Rate (@US $1.00): 6.398178 (23 Aug 2011)
Predictive Analysis: Raising interest rates is the best move to preserve value for the yuan in this
inflationary period. Food inflation is being realized in China although not as fast as in most
developing nations due to its 2% depegging from the US dollar and its lower debt position. The

4. Chinese yuan will be much slower in losing its value than the US dollar and euro. Considering
Chinese investments in Africa, Russia, and other strategic regions of the world, the yuan and
renminbi will be supported by economic activity. However, take caution that it is still directly
pegged to the US dollar and will experience the effects of its decline; albeit at a slower rate.
Currency: Iraqi dinar
Central Bank Monetary Policy: Subordinate banks must maintain a minimum of 20% liquidity
in Iraqi dinars and foreign currencies (primarily the US dollar). Subordinate banks can only
borrow from the Central Bank of Iraq (CBI) under special circumstances which makes them
vulnerable to external money markets. The debt level of the Iraqi economy which is $92.3 B in
2010 and a GDP of $82.2 B in 2010 means that economy is in a similar economic condition as the
US and the eurozone nations with more debt than its earnings. This means that the Iraqi
economy is -$10.1 B in the red according to 2010 estimates. The CBI issues out debt in the form
of Treasury notes. The CBI can receive debt relief from non-Paris Club creditors as long as it is
no more than the agreed terms as stated ikn the Paris Club agreement. This means that any debt
relief must be no more than 80% of the debt from non-Paris Club creditors. Subordinate banks
are able to choose their own interest rate margins in interbank transactions, but the prime rate is
very high (initated at 6%).
See More at : http://www.cbi.iq/index.php?pid=GovernmentSecurities
Exchange Rate (@US $1.00): 1169 (23 Aug 2011)
Predictive Analysis: Neither the Iraqi dinar nor the Iraqi economy is sustainable in the long-
term. The economic structure will not allow the Iraqi economy to become self-sufficient, and the
economy is in a very negative position. It is too dependent on the US economy and the global
money markets which are directly connected to the diminishing US dollar. The CBI prime rate
(6%-9.5%) will help the Iraqi dinar sustain itself longer than it would at the US prime rate
(0.00%-0.25%) due to higher interest rates enable capital flows during inflationary periods. The
Iraqi dinar has increased its value by 25.8% since its inception in 2004. Much of this has to do
with its debt relief from creditors. Nevertheless, with the decline of the US dollar, the Iraqi dinar
will continue to lose value. However, its higher interest rate level may keep it afloat for a time.

5. Currency: The Euro
Central Bank Monetary Policy: The European Central Bank is also implementing a monetary
policy of buying long-term government debt issues—creating inflationary pressure and it raised
its key rate to 1.5%.
Exchange Rate (@US $1.00):0.693281 (23 Aug 2011)
Predictive Analysis: The euro is headed in the proper direction by raising its key rates. The
move to buy bonds from its failing member states will only prove to prolong the pain and
suffering of those economies. The euro—as other global currencies--is experiencing acute
inflation. To add insult to injury, interest rates are not being adequately raised to check, or
balance, the unbridled inflationary pressure. The additional liquidity supplied to the euro zone
will only exacerbate the intense economic pressures on those member states. The subordinate
banks will have liquidity with less income-generation due to decreased loan distribution. Banks
are reluctant to distribute capital with currencies that have diminishing purchasing power and
low interest-rates. They will not make much money from loan distribution under these
conditions. The lack of capital distribution will have an adverse effect on industry which prefer
to retain their profits and earnings by borrowing from banks for their business expansion needs.
The central bank's urging of fiscal policy implementation by keeping interest rates low and
removing social programs such as health care and supplemental food programs will cause social
upheaval and will cause the economic pressures to collapse the economies of the euro zone at an
unexpected rate. Considering that the euro is second most-widely used currency in the world, the
collapse of the euro will have widespread repercussions throughout the global markets. It
appears that the ECB's strategies are designed to cause the euro to collapse on a deliberate basis.
The austerity measures being imposed will not save nor help the targeted member states. It will
destroy them. It makes no sense to keep interest rates low when the currency is losing its
purchasing power through inflation. It is highly plausible to expect much more social and
economic unrest in the euro zone once the euro collapses.
Currency: Nigerian Naira
Central Bank Monetary Policy: They have raised their Monetary Policy Rate (MPR)--the
nation's key rate to 6.25% and they have adjusted the Standard Lending Facility (SLF) rate to
8.25% and the Standard Deposit Facility (SDF) rate to 4.25%. The central is prepared to—but
has of yet has not—added liquidity for credit facilitation purposes.
See more at: http://www.cenbank.org/monetaryPolicy/decisions.asp

6. Exchange Rate (@US $1.00): 154.779 (01 Sept 2011)
Predictive Analysis: The Nigerian naira is experiencing inflationary pressure, but the naira is in a
better position than the euro and the US dollar because the Nigerian central bank has raised their
key interest rate to slow down the rate of inflation in order to help preserve the purchasing power
of the naira. This will help stabilize the naira which will help stabilize prices. Capital inflows
from external economies will increase economic activity and the increase of domestic businesses
will also increase economic activity. This will enable the gross domestic product to support the
naira during this inflationary period. However, that support is limited due to the naira's pegged
position to the US dollar and its dependency on the British commonwealth—which is supported
by the euro. Nevertheless, the naira is in a stronger position than its US and European
counterparts, and we expect stronger and more stable market activity throughout 2011-2012
than the euro and the US dollar. However, we recommend the central bank does not add
liquidity, but to reduce it in order to bring down prices and to effectively facilitate credit
concerns. This would make more sense than to exacerbate current economic conditions by
adding liquidity in an inflationary period. The Nigerian central bank's restraint is most
applaudable.
Currency: Bahamian Dollar
Central Bank Monetary Policy: The central bank issued B$100,000,000.00 in Bahamas
Registered Government Stock (BRGS) that will b repayable from 2016-2032. Any overage will be
refunded early without interest accrument. The central bank also lowered its key interest rate
from 5.50% to 4.75%.
Exchange Rate (@US $1.00): 0.99998 (01 Sept 2011)
Predictive Analysis: The Bahamian dollar is relatively at par with the US dollar. However, the
moves that central bank is making will make the Bahamian dollar actually stronger than the US
dollar over time. Instead of bond issuance, the Bahamian central bank issue out BRGS's to its
citizens exclusively, and they can only be purchased with Bahamian dollars. This will absorb
inflationary pressure. The absorption of liquidity is limited to B$ 100,000,000.00—which is
relatively a small amount. However, this move will ensure full preservation of the Bahamian
dollar. Secondly, the BCB lowered interest rates, but the interest rates are still relatively high.
This will most definitely slow down and minimize inflationary pressure. You will witness the
increase in purchasing power and the stability of prices in this nation. Although it is part of the
British Commonwealth, the Bahamian dollar will not decline as quickly as its British and other
commonwealth counterparts. In fact, it is expected that the Bahamian economy will excel that of
its Western counterparts in terms of economic growth. MGE19 is excited about the Bahamian
dollar.

7. Currency: Haitian Gourde
Central Bank Monetary Policy: The Bank of the Republic of Haiti's fiscal policy is the reduction
of expenditures and investment in infrastructure to repair the damage caused by hurricanes and
the great earthquake that shook Haiti in 2010. Its monetary policy includes the trading of short-
term Treasury bills. The Haitian government received USD $8.9 M in the form of IMF Special
Drawing Rights (SDR's) and a total of USD $13.1 M by the IMF.
Exchange Rate (@US $1.00): 40.3500 (2 Sept 2011)
Predictive Analysis: The Haitian economy has been hard hit by natural disasters and external
money-supply forces. The Hatian gourde is in a weak position for several reasons. Firstly, the
central bank's monetary policy reflects that of the US central bank. Secondly, the Haitian
central bank is owned by the American bank Citibank and its credit is issued by France's BNP
Paribus through the national Haitian credit bank. This explains why the central bank's
monetary policy is similar to that of the US central bank. Thirdly, the Haitian economy is
buoyed by external aid and debt. Infrastructure is most critical and important, and must be
invested in. However, the rebuilding efforts have been slow and stagnant—in spite of the
hundreds of millions of US dollars raised for that purpose. This sluggish rebuilding effort will
prove to further slow down and exacerbate the Haitian economy. Prices will continue to rise, and
unless the rebuilding process expedites, the GDP of the Haitian economy will dramatically drop
in the long-term. The Haitian gourde is in danger of experiencing hyper-inflation.
Currency: Afghani
Central Bank Monetary Policy:
Exchange Rate (@US $1.00): 43.3300 (1 Sept 2011)
Predictive Analysis:
Currency:
Central Bank Monetary Policy:
Exchange Rate (@US $1.00):
Predictive Analysis: