When a tin-foil-hat-wearing blog full of digital dickweeds suggest the dollar's reserve currency status is at best diminishing, it is fobbed off as yet another conspiracy theory (yet to be proved conspiracy fact) too horrible to imagine for the status quo huggers. But when the VP of Research at the New York Fed asks "Could the dollar lose its status as the key international currency for international trade and international financial transactions," and further is unable to say why not, it is perhaps worth considering the principal contributing factors she warns of.
Enter the Golden Dragon ... China is moving closer to positioning itself as the physical gold trading hub of the world and the world’s gold price discovery centre. It is a natural progression for the largest economy in the world and for the world’s largest gold buyer, importer and indeed producer. The Shanghai Gold Exchange (SGE) is launching its yuan denominated international bullion trading exchange next month.
Looking at the past 100 years of the US dollar's history, one theme becomes abundantly clear: in times of crisis, the US government has no issue with changing its own rules or breaking its own laws. And those "temporary" emergency measures have a nasty habit of quickly becoming permanent. As we see the US money supply exponentially accelerating since the 1970s, and the Federal Reserve more than tripling its balance sheet since 2008, it's only prudent to ask the question: Without constraints, are we in danger of destroying the purchasing power of our currency by making too much of it?
"Anti-Putin" Alliance Fraying: Germany, Slovakia, Greece, Czech Republic Urge End To Russian SanctionsSubmitted by Tyler Durden on 08/16/2014 11:04 -0400
Greece, Slovakia, Czech Republic, Germany... the chorus of voices demanding an end to Russian sanctions is starting to drown out the neocon warmongering efforts of the west...
Suppresses true money velocity concealing real inflation risk to the economy
Global crises wreak havoc on all levels of existence, not to the mention the great cost to human lives. If we are to learn from history, however, it seems as though we might have to nevertheless brace ourselves for yet another one in the near future, as it marks the end of one saeculum and the start of a new economic paradigm aligned more positively with proper balances of trade, debt, and policies. The US is trying to postpone the crisis by printing money, however this is creating currency wars with nearly all major central banks in the world. As history has shown us time and again, causing this delay through money printing will only aggravate the problem, not only not preventing the inevitable, but indeed making the transition more painful and costly.
The US is clearly now pushing Russia towards war. But if you read the signs correctly, Russia has been preparing for exactly this outcome for many years.
It’s common for the world’s most powerful country to issue a currency that becomes adopted around the world as the standard for international trade. But whenever that country reaches a point of epic, terminal decline, and especially when it rapidly debases its currency, the rest of the world seeks an alternative. The US has been enjoying this special privilege for decades now. And while these changes never happen overnight, it’s clear that the dollar is quickly losing this status.
"The US government's decision to apply more sanctions on Russia is a grave mistake and will only escalate an already tense situation, ultimately harming the US economy itself. While the effect of sanctions on the dollar may not be appreciated in the short term, in the long run these sanctions are just another step toward the dollar's eventual demise as the world's reserve currency."
One can’t help when looking at all the geopolitical as well as threats of non-containment of the deadly Ebola virus and wonder: Who’s in control here? Here’s a hint – it’s not the people lining up to give the message via oratory salvos. One thing has now been shown in vivid detail: The more messaging put out along these same lines will only make it abundantly clear to any and all opposition that those in charge haven’t a clue.
“The point of a series of regional wars organized by the Americans, especially today’s catastrophe in Ukraine, centers on the U.S. securing control over all of north Eurasia” to bolster “its position against China. That’s how the U.S. military and oligarchs are trying to maintain leadership in the global competition with China....Task no. 1 is to block those threats to economic security that are now coming from the U.S., neutralize them by reducing the dependence of our external economic activity on the mercy of American politicians, whose aggressiveness threatens the entire world."
Physical gold is migrating to the East (Russia, China) and, with it, power and influence. We see it with China and Russia progressively imposing their will, building consensus with a great many countries that wish to end American domination made possible by their capacity (privilege) of issuing the world reserve currency. The saying, “He who holds the (physical) gold makes the rules”, is truer than ever. The announcement of the creation of the BRICs development bank is just the first cornerstone in the new international monetary edifice. All we have to wait for is the first official announcement from the East of a new means of settlement of commercial trade based on one or more tangible assets, with gold. Afterwards, logically, an announcement of the convertibility of certain currencies into gold, or even the creation of a new currency that would be convertible to gold, should be made.
Empires are not the result of conscious thought; they happen when a group is large enough and powerful enough to impose itself on others. But empires are expensive. They are typically financed by theft and forced tribute. The imperial power conquers... steals... and then requires that its subjects pay “taxes” so that it can protect them. The US never got the hang of it. It conquers. But it loses money on each conquest. How does it sustain itself? With debt.
"Stop Putin" Coalition Cracking: Greece Laments "Blind Obedience To Cold War Strategies Of Brussels And Washington"Submitted by Tyler Durden on 08/07/2014 11:03 -0400
It was all fun and games while the grand western "Pariah Putin is evil" alliance was calling the shots, lobbing one sanctions after another, and Russia was quietly sitting there and taking it all. But once Europe realized that suddenly its food exporters are about to see their revenues plunge (and ostensibly lead to even more domestic deflation as all the excess produce floods domestic markets) and lead to gaping trade deficits, suddenly cries that Putin's retaliation is "unfair" have filled the air. What's worse, the moment Russia retaliated, the grand alliance started to crack. Enter Greece which has hundreds of millions in food exports to Russia, and which was the first country to hint that it may splinter from the western "pro-sanctions" alliance.
For seventy years, one of the critical foundations of American power has been the dollar’s standing as the world’s most important currency. For the last forty years, a pillar of dollar primacy has been the greenback’s dominant role in international energy markets. Today, China is leveraging its rise as an economic power - and as the most important incremental market for hydrocarbon exporters in the Persian Gulf and the former Soviet Union - to circumscribe dollar dominance in global energy, with potentially profound ramifications for America’s strategic position.