By "Punishing" France, The US Just Accelerated The Demise Of The Dollar

Tyler Durden's picture

Not even we anticipated this particular "unintended consequence" as a result of the US multi-billion dollar fine on BNP (which France took very much to heart). Moments ago, in a lengthy interview given to French magazine Investir, none other than the governor of the French National Bank Christian Noyer and member of the ECB's governing board, said this stunner at the very end, via Bloomberg:

  • NOYER: BNP CASE WILL ENCOURAGE ‘DIVERSIFICATION’ FROM DOLLAR

Here is the full google translated segment:

Q. Doesn't the role of the dollar as an international currency create systemic risk?

 

Noyer: Beyond [the BNP] case, increased legal risks from the application of U.S. rules to all dollar transactions around the world will encourage a diversification from the dollar. BNP Paribas was the occasion for many observers to remember that there has been a number of sanctions and that there would certainly be others in the future. A movement to diversify the currencies used in international trade is inevitable. Trade between Europe and China does not need to use the dollar and may be read and fully paid in euros or renminbi. Walking towards a multipolar world is the natural monetary policy, since there are several major economic and monetary powerful ensembles. China has decided to develop the renminbi as a settlement currency. The Bank of France was behind the popular ECB-PBOC swap and we have just concluded a memorandum on the creation of a system of offshore renminbi clearing in Paris. We have very strong cooperation with the PBOC in this field. But these changes take time. We must not forget that it took decades after the United States became the world's largest economy for the dollar to replace the British pound as the first international currency. But the phenomenon of U.S. rules expanding to all USD-denominated transactions around the world can have an accelerating effect.

In other words, the head of the French central bank, and ECB member, Christian Noyer, just issued a direct threat to the world's reserve currency (for now), the US Dollar.

Putting this whole episode in context: in an attempt to punish France for proceeding with the delivery of the Mistral amphibious warship to Russia, the US "punishes" BNP with a failed attempt at blackmail (recall that as Putin revealed, the BNP penalty was a used as a carrot to disincenticize France from concluding the Mistral transaction: had Hollande scrapped the deal, BNP would likely be slammed with a far lower fine, if any). Said blackmail attempt backfires horribly when as a result, the head of the French central bank makes it clear that not only is the US Dollar's reserve currency status not sacrosanct, but "the world" will now actively seek to avoid USD-transactions in order to escape the tentacle of global "pax Americana."

And, the biggest irony of all is that in "punishing" France for dealing with Russia, that core country of the Eurasian alliance of Russia and China, the US merely accelerated the gravitation of France (and all of Europe) precisely toward Eurasia, toward a multi-polar (sorry fanatic believers in a one world SDR-based currency) and away from the greenback.

Or shown visually (as we have ever since 20120).

Meanwhile, somewhere Putin is still laughing.

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gimme-gimme-gimme's picture

American's have been eating other people/countries lunch for a long time now. But that time is slowly coming to an end with economies moving away from the dollar as a reserve currency.

ebworthen's picture

"Pride goeth before destruction."

It is hubris that will bring about our tragic downfall.

booboo's picture

"The wicked freely strut about when what is vile is honored among men"

TheSecondLaw's picture

"And what rough beast, its hour come round at last,

Slouches towards Bethlehem to be born?"

ebear's picture

Equally applicable to the French, or anyone else for that matter.

I'd just like to know if the USD ceases to be the global reserve, then where does all that money go that's currently in USD?  Where's the deep market that can absorb all that?   China?  Europe?   Russia?  Seriousy, don't make me LOL.

Anyone holding their breath on the dollar's demise is going to turn blue, then purple, then black long before it happens.

Remember: bears are always early.   Always.

Troublehoff's picture

Maybe, nobody really knows when the inflection point will come...

...but forgetting Russia completely, the GDP of China plus the EU is double that of the US so don't get too comfortable

ebear's picture

"Maybe, nobody really knows when the inflection point will come..."

Going by the down votes there's a lot of people here who think they do.

However, just because you want something to happen doesn't mean it will.

And why would you want that anyway?

As for GDP, those numbers are relatively meaningless and don't address the real issue which is:

How deep is the international market for your currency, and how confident is the international community that your currency won't collapse and your bond commitments will be honored?

To which I would note:

Europe is a house divided headed straight for a fiscal brick wall.

Russia has already defaulted on its bonds : 1998

China is presently unravelling like a cheap suit.  Total black swan territory.

 

Final point:  making investment decisions based on an ideological viewpoint is the surest way to lose money.

 

actually, one more point:  It's not about being comfortable, it's about dealing with the evidence at hand, despite how unpleasant it may be.

 

SWRichmond's picture

yes and the evidence at hand leads people like you to indulge this "least dirty shirt" nonsense.  

the entire developed world is a fiscal and financial basket case.  in a situation like that making the case for keeping the current holder of the reserve currency is a fool's errand.  that is especially true when the holder of the reserve currency is grotesquely over extended militarily all over the globe; when the holder of the reserve currency has, as it must, pissed off the entire rest of the globe; when the entire rest of the planet is looking for a better deal.

it is for this reason that I have been ready for decades for someone else to pick up the mantle of the world's reserve currency, world's policeman and general a******.  

Troublehoff's picture

And why would you want that anyway?

Because the status quo gives an unfair advantage to the US, and I don't like unfair advantages. The US can print money, spend it on wars, or on bailing out commercial banks, and foreign central banks will soak up the dollars, effectively picking up the tab.

As for GDP, those numbers are relatively meaningless and don't address the real issue which is:

How deep is the international market for your currency, and how confident is the international community that your currency won't collapse and your bond commitments will be honored?

Disagree, GDP is a pretty good indicator of the size of an economy and thus reflects the depth of its markets reasonably  well, and as far as honouring bond commitments go, the US only has one answer, and that is simply to print more money.
Final point:  making investment decisions based on an ideological viewpoint is the surest way to lose money.
Agreed - I wouldn't invest in any currency - they're all trash.
Calmyourself's picture

Hyperinflation eats all that wealth..

Jerk_Store's picture

I'd just like to know if the USD ceases to be the global reserve, then where does all that money go that's currently in USD?  Where's the deep market that can absorb all that?   China?  Europe?   Russia?  Seriousy, don't make me LOL.

 

US real estate maybe...commodities like beef,grain, oil, etc. driving up prices in the USA..US produced goods like airplanes and weapons. What would you do if you were holding a massive amount of dollars that you wanted to get rid of?

August's picture

I'm fuzzy on the whole good/bad thing. 

Is a 100% increase in the real cost of living "bad"?

ajax's picture

 

 

"This is going to end real bad for us in the US, real badly."

And now that FATCA's in full swing you Yanks are truly screwed, worldwide screwed.

"Nowhere to run nowhere to hide"

 

 

UselessEater's picture

and GATCA and TiSA....."they're" on a roll

Kprime's picture

exxxxceeelllent (in the voice of Mr. Burns), with the finger tent.

Bangin7GramRocks's picture

So you are all saying that indeed the big banks are untouchable? I thought we wanted treasure and blood from all these sick fuckers? Now I'm confused. They should all be on Devil's Island, but you don't even believe that we can fine them! Strange days indeed.

gatorboat's picture

"This is going to end real bad for us in the US, real badly."

Two strongest currencies in the world (USD and EUR) have been in ZIRP five years now to allow unlimited borrowing by insolvent governments (and insolvent banks).

There is no road back from this.  Interest rates cannot be raised anytime in the future.   USD and EUR will be in ZIRP from now on. 

USD and EUR are being sacrificed to kick the can a little longer, keep insolvent governments and banks going a little longer.

But the end will come. It's inevitable.  ZIRP will destroy a currency sooner or later from excessive printing (to fund exponential debt).

There won't be a debt collapse, but there will be a currency collapse.

Fed and ECB are doing the very same thing Weimar Germany did, print the currency to oblivion.

They just make it look legitimate via buying bonds with the newly printed currency, something Weimar Germany didn't do.

Those bonds are worthless.  They come from insolvent governments and banks.  They might have AAA ratings.  It doesn't matter, they're worthless.  The only way they pay off is by rolling them over into new debt.  So they really don't pay off.  The borrowed money is never paid back.

So it's Weimar Germany with some accounting gimmicks to make it look legit.  That's all it is.  

"We have these AAA government bonds and securities on our books as collateral for these loans, so our balance sheet is fine."

But those bonds are from insolvent governments and banks, so the AAA rating is worthless.

If the printing stopped, these bonds couldn't be rolled over into new debt, they would default, these insolvent governments and banks would go bust overnight,  and the whole ponzi scheme would come crashing down.    

So the printing will go on, guaranteed.  There is no other choice.  These two strongest currencies in the world will be printed to oblivion, guaranteed. 

This is why America won't be a superpower much longer.  USD will collapse at some point from severe over-printing.  It's inevitable.  

America might have the strongest military in the world.  It doesn't matter when the currency collapses and the military is paid in worthless currency.  They'll abandon their weapons and their posts, refuse to fight anymore.  If they're overseas they won't be able to get home, they'll be stranded where they are.

 

Freddie's picture

http://www.tfmetalsreport.com/podcast/5903/jackass-red-glare

 

Dr. Jim Willie saying Jamie Dimon cancer story is total BS.  It is about Dimon getting out of JPM as fast as he can run.  I guess Dimon fears tha nail gun.

Early start of the recording first few minutes. About 2 minutes into the recording.  Weird.  Jim Willie has some amazing sources.

strannick's picture

In that same piece Willie said BNP Paribas was being punished for helping someone (Putin) dump Treasuries.

applelover's picture

Can you please explain? Thanks.

kliguy38's picture

Sending in spec ops now into paris for recon......deploying two divisions to GB for staging...... ICBMs being re programmed for Paris.......We're gonna teach the french frie eating hairy legged women a couple of things about the Amerikan way........

Winston Churchill's picture

Many a true word said in jest.

Pax Americana will use a scorched earth retreat.

Vive La Frappe.

International Jew's picture

You act as if American's are still in control.  I assure you, Jews and communists are.

Escrava Isaura's picture

With all the due respect this title is a misprint. Here’s the real meaning:

“By punishing France, US war planning is moving accordingly”

knukles's picture

The true punishment of France would be to force all French women to shave their armpits and legs as well as bathe at least once a week.

BTW, when I used to live in Europe in the 60's and 70's there truly were French women wo smelt pretty ripe and did not shave.  The is a reason for stereotypes, folks.
The Brits smelled pretty ripe, too.
And they still have shitty teeth.
And are by and large a country of alcoholics.
And pedophiles

Now that's out of the way, we can goon to important stuff.
Like why some forms of sex are referred to a "Greek"

TahoeBilly2012's picture

Almost all my friends are alcoholics, while none (that I know of) are pedophiles...

CCanuck's picture

Congress is full of Pedrophiles.

Not Too Important's picture

So is Parliament:

'(UK) Secret service infiltrated paedophile group to 'blackmail establishment''

"The former civil servant has told detectives investigating the activities of paedophiles in national politics that the Metropolitan Police’s Special Branch was orchestrating the child-sex lobbying group in the late 1970s and early 1980s."

http://www.express.co.uk/news/uk/485529/Special-Branch-funded-Paedophile...

Elm Guest House abuse scandal: Picture of Princess Diana and Prince Charles wedding day barbecue at "perverts" home

http://www.mirror.co.uk/news/elm-guest-house-abuse-scandal-1857685

 

But it really begs the question, who did Sandusky share those kids with?

 

Dublinmick's picture

It was a 3 state pedophile ring Sandusky was mixed up in. It went right to the top.

http://vortexcourage.me/2014/06/30/mass-murder-of-canadian-children-admi...

MiltonFriedmansNightmare's picture

All "public servants" are compromised in some fashion, and yes, a great many are pedophiles I.e. Janet Reno.

FeralSerf's picture

It has been told that Napoleon sent a message to his Josephine from Russia saying: "I'll be home Sunday. Don't bathe."

"why some forms of sex are referred to a "Greek""

"Originates from South Australia. Meaning to take part in anal sexual penetration and commonly used as an insult or derogatory comment among youth.
You take it fuckin greekstyle!"

http://www.urbandictionary.com/define.php?term=Greek+Style

Then there's Russian Style (Def #3 the most interesting):

"A very difficult sexual maneuver involving two people where one person lies on their stomach and the other places their penis inside the others mouth while shooting an AK-47 with the butt of the rifle in between the legs of the person lying down. It reduces recoil and produces good oral sex.
Person 1: I was with this total slut last night. We went down to the shooting range and I banged her russian style
Person 2: How was the recoil?
Person 1: What recoil?"

http://www.urbandictionary.com/define.php?term=Russian-style

Stalkedbyhackers01's picture

Beware of hackers declaring anal jihad. As someone who has had an anal jihad declared on them since last August I feel for those who have an anal fatwa issued on them. The anal jihad started when I made a drunk youtube comment. Now the anal jihadists have went so far as to go to DHS since I went to the FBI since I was sick of their nonsense. The anal jihadists plan is to try presenting me as something I'm not.  Many on this site knows my anal jihadists well but due to various factors won't admit to it. Though I wonder how other people would feel being stalked and harassed since last August. Anyway if anyone from .gov is reading this I have a fatwa against me by hacker anal jihadists. I was even told I was hitlisted.

greygoo's picture

Yeah, Americans set the bar so fucking high.......

https://www.youtube.com/watch?v=gIfuo4ShViI

 

tonyw's picture

c'est exceptionelle

i just couldn't watch it all.

Lea's picture

knukles,

You lived in Europe in the sixties and seventies, you said? That would have been the no-wash, Butch feminist and Hippie rule period. Things have changed. As for the Brits being what you say, at least credit them with real, unheard-of elsewhere hate against pedophiles. Nobody likes to see them them in jail better than the Brits, and I personnaly thank them for that.

Now, we could argue that America is the world's first and foremost LGBT/gender confused/porn consuming country, couldn't we?

 

Not Too Important's picture

"As for the Brits being what you say, at least credit them with real, unheard-of elsewhere hate against pedophiles."

Only the lower classes, and certainly not the immigrants. Or maybe that's why they're being let in, to vote down consent laws in exchange for allowing forced female circumscision and honor murder.

The illegals coming in to the US, after getting the right to vote through Executive Order, will vote in a whole new Constitution. One not in anyone's favor, unless one of the 'families'.

knukles's picture

Absolutely to it all, Lea.
Especially the foremost LGBT/gender confused part.
Fortunately, most Yanks don't give a rats ass about other people's gender identity and sexual preferences.
The Massive Angst Surrounding Such is a product of the liberal media's (whatever the rationale, I don't care but certainly is politically based) efforts to the point where the vast majority again, are so fucking sick and tired of hearing about it, everybody who screams about being a bigot, etc., can just go fuck themselves or die trying.  We're sick of having the shit, the whole discussion rammed down our throats.
Most people agree that one's sexual preferences, etc., are their own business and government has no business in anybody's bed rooms, etc.
And in fact should be silent upon the whole issue.

 

New_Meat's picture

It has gone from "the love that dare not speak" to "the perversions that won't shut the fuck up"

ajax's picture

 

 

Now get back to your Metallica cds Knuckles...

barre-de-rire's picture

said the man living in a country who shoot their presidents...

 

so, buddy, what the fuck you wait to kill you monkey big ears prez ? have ballz to buy gun in walmart & shoot can in forest but not to go washinton with loaded gun & ring the door ?

 

fucking mentals, you totally lost civilization.

 

 

ajax's picture

 

 

"America is the only country that went from barbarism to decadence without civilization in between."

- Oscar Wilde

IndyPat's picture

Coming from that man pleasing douche, I'll take that as a compliment.

Lea's picture

And wouldn't Wilde have known about decadence... A true expert, himself. Way worse than you think. Dirty scumbag pedo, in fact.