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Russia FinMin Calls For Shift Away From US Treasurys Into BRIC Bonds, Settlement In Non-Dollar Currencies
It is no secret that Russia has had enough of the Petrodollar, and in light of ongoing western sanctions - which many view not so much as a reaction to events in Ukraine bur merely as an attempt to halt the Russian revolution against the Petrodollar status quo, crushing its economy before the momentum grows and more countries join Moscow - is constantly thinking of ways it can ditch the dollar as a medium of exchange as fast as possible. The problem is that when it comes to retaliating against the West, Russia - short of declaring an embargo on USD payments for its commodities - has little control over what currency its western trading partners will pay in. So instead it is focusing on its net exporting peers, aka the BRICS, with whom as previously reported, Russia had launched a "bank" alternative to the IMF when it comes to backstop and bailout funding, one that avoids reliance on the SDR, the USD, and on Western empathy.
It is the same BRICs that, Russia's Prime Minister Dmitry Medvedev, told Rossiya TV in an interview earlier today, should conduct transactions in national currencies, bypassing cross-rates with the US Dollar, adding that "we can easily make mutual settlements directly," and the mechanism should be beneficial to both sides of transactions.
And if it wasn't clear by now, Russia pivot away from the west and toward China is pretty much complete. Medvedev also said that "our collaboration with China is of strategic importance. We have great, brilliant political contacts, we have excellent economic relations. [China] is our strategic partner, and we are interested in expanding the volume of cooperation. We are not afraid of collaborating because we are confident that this is equal, friendly and mutually beneficial collaboration in all areas."
Meanwhile, regarding escalating Western tensions, the PM said that sanctions have created a bad situation for Russian banks on financial markets, all sources of liquidity are frozen. "We regard this as a senseless and ugly decision toward Russia, but we’ll manage without it." So does that mean that China will step in to provide the required FX reserves as Russia minimizes its USD exposure? Perhaps, but not entirely: Medvedev did add that "Asia, other markets “unlikely fully” to compensate for frozen European financing."
The PM also said that Russia passed through similar squeeze in 2008-2009 and can manage with central bank resources, adding that Europe is still important market for Russia, if EU members "make no absurd decisions to squeeze us out of this market, we’ll stay there, it’s interesting for us."
But while Medvedev was the good cop today, it was Russia's finance minister Anton Siluanov who was the designated "bad guy", and as the WSJ reported, Russia is considering diversifying its debt portfolio away from countries that have imposed sanctions on Moscow and into the papers of its BRICS partners.
Speaking on the sidelines of an annual investment forum in the Black Sea town of Sochi, Mr. Siluanov said the Finance Ministry wants to diversify its investment basket, and is looking for higher yields without too much risks. He said the ministry will consider buying papers issued by Brazil, India, China and South Africa, which along with Russia are known collectively as the Brics countries.
"[We would like to] walk away from investing in papers of the countries that impose sanctions against us," Mr. Siluanov said, adding that the reshuffle would be carried out gradually. He didn't elaborate on when the first purchases of Brics debt may take place.
The good news for the US, now that Russia appears set on either rapidly or slowly selling off its US Treasury exposure, is that Kremlin has possession of only $115 billion in US paper, which happens to be more than the $100 billion it reported in May when the first shock of a Russian bond sell off hit the market, and both of which happen to be amounts the Fed can easily monetize into its record big balance sheet (which, taper or no taper, just grew by $28 billion in the past week alone) in just over a month.
But at the end of the day it is not what Russia does, but what its other BRIC peers and US Treasury holders do. Because while Moscow may be in possession of just over $114.5 billion in US paper, China, Brazil and India share among them some $1.6 trillion in US Treasurys, better known as "leverage" in every sense of the word, or an amount that not even the Fed could monetize on short notice without sending a massive shockwave through the global capital markets.
In other words, while the US pushes Russia hard, it may be careful not to push it too hard, and in the process start an avalanche that leads to a BRIC bond avalanche, which may well be one possible endgame as the world is forced to transition from the US Dollar as a reserve currency in the coming years.
Never gonna happen?
Considering that none other than Obama's own former chief economic advisor, Jared Bernstein, is advocating dropping the USD as the global reserve currency, we would be careful with using the word "never" in this specific case...
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Dollar Dumps sprouting up around the world. Not even worth recycling. Gold and Silver on the other hand are one's best friends.
How many shoes have to drop?! Just freeking die already!!!
Not wishing to finance their own imprisonment, imagine that.
Besides all the blathering and bellicose smarminess of the global financial players, let alone the ZH peanut gallery, may I remind all that it is firmly ensconced in international law, that declining another country access to the "international payments mechanism" constitutes an "act of war". Mechanistic language be damned, I very much doubt that most people, including our very own dear readers understand the gravity of the current financial tribulations undertaken on a truly global scale.
This is not a mere preference of choice of payments, currency alignments or banking colossus designation as important or profitable
This is a Cold War, Hotter than any heretofore engaged in the Post WWII era, for the literal economic dominance of commerce and trade. Which, in turn with increasing or decreasing demands for particular currencies, will enable or destroy the ability of Economic Powers, Giants and Empires to Finance their Day to Day Activities.
The ability to Finance, Literally, Empires, should not be taken lightly, for the history of mankind is replete with the rise and fall of such predicated upon the nations' very wealth, which in the age of fiat, demands universal faith and acceptance.
Understand, this is, to destroy the financing mechanism, eliminates the projection of power, and thereby leaves in tatters, the Edifice of Empire. Memories of such then become mere Illusion sourrounded by pitiful self agrandizements, lies and deceit, culminating in the delusion of relevance.
This is for all or none.
And perhaps, the final bids shall necessarily take the forum of a detachment not only from a specific currency but from a specific currency in favor of other than fiat .... in exchange for scarce resources.
God help us all, for this is not likely to end well. The myriad of what can go wrong by intent, let alone unintended consequences and circumstances is virtually unimaginable at this juncture.
What can go wrong will go wrong. But on the plus side, everyone has nukes.
Wise words Knuckles.
Russia is an isolated fascist regime. The entire country is run by a clueless homosexual. Putin's been drinking too many tainted juice boxes.
Eh? Come again ?
http://www.zerohedge.com/users/doofus-0
Member for: 1 week 4 days
This The Doofus is a newly inbred batch of trolls at ZH board.
It seems they're mostly programmed to rejuvenate by every 30 days or less. Some familiar douche bag trolls already disappeared... lol
Wow what a fucking troll and on a Sunday morning. You must be collecting overtime pay from Obama.
Worst thing about weekends here on ZH
Way too much Drinkin Thinkin
Agree. I wanted to muse over Knuckles words with some timing and planning issues.
Some say that we will see the US Financial Collapse before President Obama leaves office, a strategy that gives the new president a clean slate (just like in 2008).
The timing of the Last Crisis is a very Big Coincidence, like it was planned. And seems like Obama was selected along with Henry Paulson earlier, Ben Bernanke, and Tim Geithner & Larry Summers.
Also we see reports that Wealthy are buying Gold Now, and leaving the stock market...
Obama seems to need National Emergencies, War to gain GDP Growth... unless he can cause a global depression and play it as another simple "US Recession". He is careless about job creation & homeless or workless and about diseases entering the country, but the boost in GDP from reaction to Disease wouldn't make up for loss of wealth & labor hours.
Military, Financial, Political Superpower...continues with all policies from 2008.
Another Danger is further Extraction of wealth of Middle Class through Carbon Tax, Mileage Tax, Or more Federal Regulation and Legal Requirements. For instance nationwide roadblocks which inhibit Commerce & normal citizen business. Obama could pass legislation that greatly harms Trade.
I think we will see some big things happen in October or November: To either influence the US elections, or right after them.
It probably will not take much time after that.
Now, now; it's important to look on the bright side of the street; I'm sure everything will turn out just peachy.
You make exceptionally good points !
On 3-4 June 1989 Tanks entered Tienanmen Square and the USA accepted matters and MFN status was renewed
http://adst.org/2014/05/managing-a-massacre-the-ramifications-of-tiananm...
But Russia is vilified. It is clear there is a war and it is underway with positioning and it will spin out of control. Germany feared a two-front war in 1905 but it feared Russian industrialisation which was growing fast and the threat it would pose - it needed to knock out France first as Russia's western ally hence the Schlieffen Plan.
Sarajevo was not the casus belli they had anticipated or expected and they were not prepared which is why they stalemated in the west and suffered British blockade.
The US thought they would get the Ukraine transit pipelines and fill them with gas fracked in Donetsk and thus control Europe and cut it off from overland trade routes to Asia.
It is clear US/UK maritime power politics to keep the Atlantic relevant which means they need the Suez Canal.
It is pretty clear Russia, China, India and probably Brazil will need to boost nuclear delivery systems and plan for the inevitable Armageddon Scenario with the USA and UK.
knukles,
Exellent post!
I just want to add these:
Prepare your family
Protect your savings
Growth is over.
Knukles
this may be the finest piece of writing I have read yet to describe the predicament we all are in.
Not to worry, it'll all be resolved eventually. In fact...
The future's so bright, you gotta wear shades. You gotta wear shades.
Acts of war are on paper, where they will stay. The definition of international will be changed. The world is spliting in to two seperate economies. One for the West the other for the East and the time is fast approching to pick a side.
Small trade and bleed through but the big money is picking sides.
China will have to choose if they want to lead or follow. If China chooses to follow the US then Russia burns, but so does China in time. If China chooses to lead then they will own the currency of the second economy.
TLDR: Two economies one world.
And it begins.
It is interesting to contemplate the smaller scenarios playing out within the BRICs. While the enemy of my enemy is my friend will work as an overall tactic short term - BRICs vs. US/EU - it would be interesting to watch the fallout as the unwinding begins. For one, I have to believe the Indians will side with the West on many issues. And there are so many that currently hate/don't trust China.
Kaboom.
Russia is missing the "G" in their BRIC.
That's by far their largest trading partner.
What is GM going to do about Opel ?
http://online.wsj.com/articles/gms-german-car-maker-opel-hunkers-down-in...
Russia's car market was the same size as Germany but with growth
What is Europe gonna do about GMO?
I mean seriously...a "market for automobiles"? The debt maybe...but not for a automobiles.
Maybe AN automobile (the Ford F-150, Tesla Model S)...but not for all "automobiles."
Although I would LIKE to believe that India will remain aligned with the BRICS, in a showdown I do not have confidence that they will have backbone when it counts.
Alas, I suspect that they will fold, like a cheap Made in India tent.
I respectfully disagree.
Mr. Modi's been on the business end of USA's Visa Sanctions Game. He'll go elsewhere - He blew off Team_USA's invite to go to Japan shortly after the Elections.
Also, IND-CHN Trade Volume is larger than IND-USA parings. I don't think CHN is going to sit idle and let the USA_Oligarchs take a definitive role over IND's Economy and the IND-CHN Trade Pairing.
so one would guess that's why the grand manipulation last month and wow on Friday but it is considered now to be on sale. one strange world when everything is backwards. full retard and I mean fully
Not entirely true. Lead is your best friend. It lets you retain your gold and silver.
so, here's what's really happening...
- US and EU impose sanctions, closing off finance access to Gazprombank / Rosneft / Novatek et al
- future sanctions are going to cut off sale of Russian government bonds (OFZ)
- Russia loses access to long-term financing as a result
- Russian central bank has no choice but to attract interest in buying their GKO-OFZ paper from alternate sources (various Asian and Arab countries)
- the Asian finance centers that Russia has in mind are Hong Kong, Singapore, Tokyo, and Shanghai (lol - Tokyo, practically a US proxy)... basically, wherever all the liquid sovereign and developing market funds live
- Arab sovereign funds are effectively Qatar and Saudi Arabia (again lol - US by proxy and firmly entrenched in the petrodollar)
so, you're going to areas that are less dependent on US and EU pressure but let's not kid ourselves... that pressure is still there and is part and parcel of petrodollar economics
clowns keep posting these articles announcing the death knell of the petrodollar, when all that's happening is these actions further prove the petrodollar's continued dominance... the reality on the ground is that Russia's Economic Ministry has downgraded forecasts for 2014 and is basically calling for a "cold winter" in Russia
don't get me wrong, there will be buyers, Russian bond yields are currently high which makes them attractive, but at most we're talking about alternate finance routes resulting in tens of billions of dollars, not hundreds by any means
it's judo folks... if you have a hold on me, I have a hold on you... the West is doing a great job of reworking their OODA loops to account for the "Putin effect"... Russia will be lucky if it doesn't have another year like 1998 at this rate
At current rates the Russkies would be fools to hold any US debt.
Listen Jose. Just dump it, quick and dirty. Russians are a smart, ruthless bunch. Americans are getting backed into the ropes and Rockey Balboa is about to get ass kicking.
Rocky wins, ultimately. Is this what you intended to allude to with your metaphor?
Rocky was an old fart ! The only reason why he won against Drago was because the Americans made the movie...
Listen Angel, "MS." does not understand that this is "NOT" a fucking re-run.
Sylvester is like 70 yrs old now and in fact, it's the #1 USSA trending question on facebook and yahoo:
https://answers.yahoo.com/question/index?qid=20080526021233AAFtiex
And as such stands as the "PERFECT" metaphor for the conversation. Why is Rockey Balboa and USSA aging so disgracefully? "They look sick" asks the public, "WHY"? Do they have "CANCER"!?
You did not remember the outcome of the film. I was teasing you for picking a metaphor that did not match your meaning.
I fully understand the USA ain't winning. That is why I hassled you.
Green shootskies Dmitry!
Check Mate Western BITCHEZ...
Sure looks like it, but me thinkest not. War will get hot before US says "uncle" unfortunately.
The "war(s)" are already hot covering virtually every continent and engaging just about every country in one form or another. "Get" hot seems to me to be a past tense condition
Point taken my friend.
well, good; then this implies by your own logic that the US will cry "Uncle"; soon. see, it's important to remain optimistic and look on the bright side of slaughter, barbarism, fraud, and corruption. After all, every cloud "has a silver lining".
Sometimes you don't know there's a fire till you open the door.
But I think feeling the doorknob would be a good idea.
"Backdraft" not "blowback."
Be very careful opening the door..."the fire is always looking for more fuel."
The movement in utilities last winter was dispositive. If there was a crisis in either energy or the dollar the cold winter would have crushed those plays...instead they were huge winners.
That says we're in the midst of a prolonged glut in energy production ala the 1800's.
I would be long "nuclear decommissioning." We just don't need all that output and the more regulators and politicians play with the market to pad their bottom line the more the market is "rationalized" (Tesla's, I-phones.)
Once I can power my house using the battery in my I-phone 7 (using same said phone as my only solar collector)...well, what else will I need?
Yeah but when it does get hot, they will reveal themselves as burger-eating surrender-monkeys the moment the heat touches American shores.
Hey, nobody is perfect.
What an optimist! You think there will be time for anyone to surrender? The world will be lucky to have time for a prayer. We've had no hot wars between nuclear powers for a reason, the game of (real) war has completely changed since WW2.
And so the anti-dollar coalition is born.
Born? It was born at least decades ago.
Decade? It was born in 1776 dude.
They were called "Continentals" back then.
The Bucky has done pretty well here considering it was started during he Civil War. I think it's roots can really be traced backed to the Mexican/American war of 1846-1848 actually.
Instead of a chart showing "global reserve currencies" as the Hedge does quite often they ought to show "various iterations of alleged US reserve currencies." I would count the US South's money during the Civil War as one as well.
It wasn't just the lack of steel but the lack of coal in the South as well. It should be noted the first thing the North did about defeating the South was to start rebuilding all the rail lines down there. "Railroad heaven."
Turned out to be interstate highway heaven as well.
I think the next great battle in transportation will be in subway lines as "this improves the value of real estate." MASSIVELY. And since MBS's are never going to be sold and Fannie and Freddie Mac are still in existence "printing money" as it were...
I was thinking of Bretton Woods, but there are certainly older antecedents.
http://www.nydailynews.com/new-york/empire-state-building-garners-2-1-bi...
Even billionaires want to dump USD or currencies.
Why? Simple.
Where do you hold billions in cash? If you hold them in a bank, the collapse of the bank will make your billions vanish
The "system" will have to extinguish $10 to 20 trillion. Issue is: Whose trillions?
Otherwise the world abandons USD. USD avoidance has accelerated.
In my view those who refuse their trillions to be extinguished in peace, will simply be shot dead by Saudis, Russians, Chinese etc.
History never ever changes. Elite kills elite over real assets
The Putin-Khamenei Axis is advancing too fast now fearing that Obama might not stay in power until Jan 2017.
Barack Obama existence as president is their strongest hope
PUTIN - KHAMENEI ALLIANCE is in a hurry, too much hurry.
Something is going on. Obama just offered Khamenei to only disconnect pipes into the centrifuges, not dismantle them.
Military is in open revolt followed and reported openly by the media and DXY is getting stronger, which means NY Fed is draining dollars, assuming DXY still represents REAL TRADE.
The "system" is about to break, NOT just monetarily.
Shots could be fired and I pray God I'm wrong.
Can you please explain your theory in greater detail? Genuinely interested in understanding what you mean by this.
So is he; but I doubt if any significant progress will be made.
Sad but true.
Military Complex + Saudis on one side (represented by Koch Bros as oligarch), they want USD.
Bank lobby + Iran on the other side (represented by Warren Buffett as oligarch), they want SDRs
Buffett wants oil control and wants to cooperate with Iran
Koch has and Military Complex want to maintain alliance with Saudis for oil control.
We are going to have blood being shed I very much fear. I think Military complex could bypass oligarchs and go junta like in the 70s.
Warren Buffett and his minion Obama, offered to Khamenei yesterday to just disconnect the pipes to centrifuges, not dismantle them.
Which means this is getting worse and worse because Buffett wants oil control and be a bank also with SDRs.
War between Saudis and Iran is becoming inevitable, which means everybody gets involved, of course, unless Military goes junta behind the scenes and threatens everybody shot if no obedience. Saudis can esily execute anybody.
This is my scenario
I'd hate to say it, but our country is SO messed up, that (ideally and everything being equal) a military junta is exactly what it needs: "What this country needs is a good Enema."
OTOH, given that our military is part of the Problem, we can hardly expect the current Generals in charge to be part of the Solution, to be the "Winds of Change". I fear that they are waaaay too beholden to The Usual Suspects.
Thank you, much appreciated.
We are definitely living in a time that is not that great to be rich with lots of cash in the bank
Your money may vanish abruptly
Be careful
Rubbish BS - as is would be absolutely GREAT - for every single reader and poster here - to be rich with lots (even tons) of cash in the bank.
Ekm - you live in a different - maybe somewhat paranoid - world.
But at least your stuff - sometimes - is entertaining.
He has the basic factions correct, its what he extrapolates from there,thats the problem.
I foresee Military Junta back into power in the coming months, after they ceded power voluntarily in the early 90s after soviet union fell.
Quite possible they will reneg any alliance with any oligarch or lobby for sometime until Iran issue is put to bed.
They will never accept a deal with Iran. Quds Force has blood of US soldiers in their hands.
Bloodshed will occur, I very much fear
Iran is about to capture Yemen also, now. They have Baghdad, Damascus. Now Sanaa.
Recipe for major blood.
There I agree with you. I foreseee a military putsch, and junta in charge within a year
from now.
The only other option is a truly massive US military defeat,that discredits the sheeples love
of men in 'service'.
Sounds like a damn brood mare when I hear it..
ekm1:
If I get your thesis (do correct):
Rockefeller vs. Rothschild
Rockefeller = MIC
Obama = Rothschild
Strong dollar = MIC
SDR = Rothschild
SDR = Weak dollar
Yeah I think you are in the ball park of what he was saying.
I see it a little differently. PMIC, Prison-military-intelligence-Security-Complex needs funding but it comes from Federal Authorization. The employment level shows a trend line at 2.8 Million people. The Military was reduced in the 1990s under Congressional BRAC Legislation, slightly, and Clinton flattened the budget for 4 years before allowing new increases in Federal Budget for DoD. This created a lot of shouting by the DoD Lobby.
Today you see this Shouting again by PMIC Lobby. But this time is different.
The Federal Budget & DoD have Doubled and almost Tripled. This is partly due to Privatization. Today we have a huge army of PMIC Contractors. My guess is 50% of the US Economy is now Tied directly or nearly directly to the Federal Budget. They can't hire more workers with efficiencies realized from computers.
The Truth all of us go hat in hand to Bankers. We love our Finance Managers.
But in Politics you have to have an Enemy. Obama is still immature, but he is a puppet. Like him or Hate him he has supported all the wars and covert ops and funded them under hugely expensive continuing resolutions with budget increases each year and about $1 Trillion a year goes to Military, Veterans, DHS, International Programs, and Intelligence programs. He blew it on VA Medical Funding and on getting modern computer for VA Medical Centers.
But not all Military know about the Generous DoD Spending, and we have more and more contractors each year complaining they need more Juice.
All Employees: Government: Federal
2014-08: 2,717 Thousands of Persons (+ see more)
Monthly, Seasonally Adjusted, CES9091000001, Updated: 2014-09-05
http://research.stlouisfed.org/fred2/series/CES9091000001
We digress, but the Prison Complex can be simplified in structure and cost by Outsourcing it to our NAFTA partners.
Prisons across the Mexican border and up on Elsmere Island would fix that in a jiffy - seeing that we can't ship them off to "Australia".
Listen Sell,
On "THE HEDGE" "=" is an assignment of value, while "==" is a comparison of values.
Replace Rothchilds with Warren Buffett and Bill Gates
Replaces Rockefellers with Koch Bros and Sheldon Adelson
Nobody cares about dead people. Rockefellers and Rothchilds are dead. They can't rule from the graves.
We live in Warren Buffett and Koch Bros times
However, the way it is going, Military Complex may even bypass the oligarchs and reinstate a junta, like the 60s and 70s.
This is my view
Ask Warren Buffet how trying to corner the market in treasuries worked out....
Buffett wants oil control and not lose money on derivatives. He is totally nakes on derivatives.
Rates are low so Buffett survives.
Not for long, not for long in my view. Real blood may be shed. Saudis....................
At one time Buffett wass a SILVER hound. Then like Greenspam he was taken aside and given the message...
Given your hypothetical scenario, personally, I'd clearly prefer Buffet and Gates over the evil Koch-Adelson alliance.
China will, of course, have to be very careful about doing or supporting anything that starts a stampede out of Treasuries. Losing nearly $2 Trillion would be a huge catastrophe for China.
So this transition away from Treasuries and the dollar will have to take place gradually - unless some geopolitical development, like a world war, forces everyone's hands on both sides.
It just feels like a global explosion is imminent - but maybe not. Maybe lots of bumps but no WWIII for a few more years. But I can't imagine avoiding WWIII for more than just a few more years at best. The article above makes a very good point - The U.S. and Europe haff to trounce Russia financially and economically before too many other world players wise-up and join the anti-petro-dollar-axis.
But I don't think it will work - I'm betting Russia succeeds. So this all compresses things, time-wise, I mean. The shit's gotta hit the fan soon, and one or the other has to rise to the top - I say it will be Russia-China that rises.
Listen Tierney. Russia-China-India is my guess. Then it's all over, not even close. Done, no need to stick fork in either.
The Chinese/Russians have been getting out of UST's since 2008.
Only if you believe the Govt. figures would you think otherwise,
There are lots of ways to dispose of them in every way except in name.
I doubt they are on the hook for anything.All this was planned and carried out long
before anything was made public. A public statement just announces a fait accompli,
in my experience.
Interesting, and the value of the dollar is near a five-year high.
Yeah, no shit. "Selling into strength." WINNING!
I mean seriously...the military has no idea how to pay for their "military industrial complex."
While Germany demands return of their capital in a way that makes Japan seem pecuniary the USA is building out a "space/industrial complex."
Wait until the Navy starts building out an "Undersea Industrial Complex." You'll know pretty quick if your seals are no good let alone your "superstructure."
Its rising on the basis of the official figures.We know here that they are BS.Many don't.
As I said on another thread, TPTB are just as susceptable to cog.diss. as J6P.
I deal with them on a weekly basis, and I assure you they are just as fallible as
anyone else.
Being the cleanest shirt in the laundry doesn't work when said laundry is on fire.
At some point, with all this "dollar dumping", we might actually see the demand for dollars start to fall. Maybe.
How many fucking times must I see the reserve currency graphic?
At least one more time, apparently.
Until there is a BRIC block and a China block and whatever is after that or until you click your heels three times repeating reserve currency changes.
Yeah, the heel clicking on this site is deafening.
Here's a greatly improved Global Reserve Currencies chart taking into account the gold backup, and interestingly the chart is named after the Zero Hedge, out of appreciation i guess :-)
http://dont-tread-on.me/wp-content/uploads/2013/10/Zerohedge-gold-Reserv...
Prior to the current US dollar stint, the currencies of FIVE countries each held world reserve status for an average of 95 years:
Read on "Currency Watch: Triffin's Dilemma"
The average is actually 94. The standard deviaition is 17. The US is well within one standard deviation of the average.
Could go anytime.
Seems like you lose your military strength first or lose your Banking Strength first... but they may appear to happen in the same year at the same time.
New Home for US Bankers?
Since China doesn't have derivatives and has a new Navy and has been funding projects and starting projects all over the world would seem like BRICS are an alternative.
Do Bankers Appreciate Freedom of the type of Europe better? China is dicey and India is Dicey-er. If bankers want the largest human resources to bank on... then China looks like the winning new home for US Bankers.
- Middle East, No
- Africa, No
- Mexico, No
- South America, No
- Australia, ??? Points for English Language
The US economy has been subjected to a Monster LBO.
It has been a spiral since the 1980s with ever-increasing risk and leverage.
No manufacturing company can ever generate such leveraged returns except by liquidating and becoming a bank
Nope, the average is right to be 95 among the earlier five
= (2*75 + 2*110 + 105) / 5
= 475 / 5 = 95
It takes the USA about six more years to just match the average,,,lets see then.
Portugal and Spain should be combined.
Uai!
Do the commentators ZeroHedge now have to talk to me in Portuguese-br?
Will come down from the pedestal and no longer look only navel own apple bite?
Wait six months at most, and this shit is upside down, it will be chaos in the European Union and on Wall Street.
The banksters this time they found a wall.
hehe.
It's hard to believe someone could suck as consistently as you. And lose the "hehe." It just magnifies your douche-baggery.
Será, rapaz?
This cyclical 'bull' (shit) market in the dollar may well be the last one it ever has. Maybe gold to 1k, but see you at gold 2500+ and silver well north of 50, in not too distant future. Virtually a mathematical certainty given the debt levels and trajectory and inflation already created. Not saying SPX won't go up, either, although many companies whose model is contingent on low commodity/raw material costs will get crushed, so more so int'l companies will be the ones that can hang on if they have exposure abroad to places where people save and markets are allowed to work.
And this gold conviction isn't even counting on whatsoever BRICS 'going galt' because I see them doing a lot of mercantilism and printing disguised as 'growth', too. They are improving their trajectory towards free markets, but it is a lie to say they are 'Austrian bastions'. China epitomizes malinvestment. The savings rate is what gives them a chance if they keep trending towards free markets, because savings is what is crucial; actual foregoing of consumption here and now for the greater good down the road. It's good to see these nations slowly but surely bypassing the petrodollar, but looking at the balance sheets of sovereign funds, they still are in on the dollar hegemony game, doing pegs, too, like with the yuan. Statism is statism, and there is tons of corruption abroad, too. I don't view the East as the 'good guys'. It is nauseating the narrative that the West is the 'good guys' East 'bear, bad guys', etc, but I don't fall for the hegelian, either and pull for the other crony statist side. I would say that they happen to be acting much more reasonably than the West, though, and relatively speaking much more so 'minding their own business'.
So my bullish view for gold doesn't even need to incorporate BRICS defecting, although obviously that would only accelerate the demise of the dollar.
so is this how world war 3 will start
Yes they win sorta for now. This spirals down for everyone, in the long run. Russia emerges as an empire, for a bit, they will not hit as high a high as we did. India might improve. Then flail and fall, too. China is so fucked. They hold some great cards for this one glorious second. With us on our ass, where does it go from there? They will gut each other competing for resources in this big assed game of risk.
This is the earthling's long emergency. We deplete her, she kills us off, gradually. Like the so called gradual withdrawl from treasuries.
The message is in the saying of it, not the doing. Why say it now???? If you really gave a shit about that money, you do it quiet so that there would not be a stampede.
THEY WANT A STAMPEDE. They could give fuck all about the money.
MsCreant, they are doing it very quietly. Outside of Zero Hedge no one is paying any attention to any of this at all. So far, what we have is "jawboning"; hardly an earthshaking event. I really, really, doubt there is any one who 'WANTS A STAMPEDE'; and certainly no player who doesn't give a fuck about the money. I think yoiu got a little carried away this time.
Why announce what you will be selling then?
Because they already have.
Do you honestly think they will preannounce after seeing what happens to foolish leaders that
did ?
The petrodollar is blood backed,almost just as much as oil.
I agree.
My point is that the announcement here is not about them rotating out of USTs, but getting a reaction. They would not announce if they really were going to gradually sell. They would just do it.
Please read my post below on "other options"; if I may be so bold as to make an intrusioin on your time.
Relax guys. We are in good hands. I bet Jack Lew and his team are all over these events, and don't even get me started about the steady hand of Janet Yellen to guide us. Yep, we can rest easy tonight friends.
Now, who is still left on Dancing With The Stars??
Your avatar is funny!
That's Mr. Janet Yellen to you, son.
The Fed does not have to cover bonds that China sells. They have a % paid and face value. To sell them they push them onto the market say a 1 million dollar bond at 3%. A buyer would pay them 1 million and take the bond away. ( not accounting for time into the bond or math related to current % on new bonds).
If they push too many out at once buyers would offer less for the bond this causes losses to the seller and higher effective % for the buyer.
Oh ya and they the sellers would be holding 1.6 trillion in good old USD.
That will teach us
What if nobody will buy them anymore?
as I have pointed out several times in the past; a "real" nuclear option does exist. All these "Bonds" exist as computer entries; the Fed could simply anounce, as of today, well, Monday morning, they always do this on Sunday, and yes it has been done before, the following serial number bonds, and they all have serial numbers, are invalid and will not be paid or redeemed. If you borrowed 2 T. $ from the Bank; the Bank doesn't have a problem; you have a problem. Capiche?
"If you borrowed 2 T. $ from the Bank; the Bank doesn't have a problem; you have a problem."
I think you meant the bank has a problem.
What you mean is the US Treasury has borrowed 2T. We can default or print. The Federal Reserve has bought most of the treasuries which means "we owe them." The US Govt is on the hook for that, to them. The trick is do they make moves towards the collateral of the United States if we do default?
And the Russians or Chinese would also be bag holders, they would have the "problem."
Now we are having fun!
China does not want the money back. They bought bonds to get rid of it. The US pays interest only. When the bond matures most countries do not redeem the face value they roll it over into new bonds.
If the bond is sold before the due date the new owner gets the interest payment.
Anyone buying these bonds has to be so big they are simply looking for a vehicle to remove USD bills from their economy and they will roll them over too
Either way US makes interest payment
The flow of USD from commodity sales has slowed and Russia is finding itself short of USD to buy commodities it does not have . They had to sell bonds to raise cash. You will notice for all the sanctions Russia has not said we no longer take USD for our oil...they cant
Sanctions are designed to worsen Russian cash flows and are.
I have lived under the atomic umbrella all my life. Two men with pistols at each others head do not fire, nothing to gain from it.
"which many view not so much as a reaction to events in Ukraine bur merely as an attempt to halt the Russian revolution against the Petrodollar status quo"
Many wear tin foil shoes and matching hats. You know they put CHLORINE in the water?
Must have been 10 of these types of news articles over the past month.
So WHY hasn't the USD collapsed yet?... WHY are PMs getting trashed?
This shit makes no sense.
Because the death of the USD is a process, not a single event. It is and will be marked by events, but you need to think in terms of years, not weeks or months. The dollar, in its current incarnation, is 43 years old. A landmark event that marks the beginning of its fall is Lehman. We theoretically could keep it going to 2021 or thereabouts, but that would require some fair dealing on the part of our government, the Fed and oligarchs.
Best way to get out of the dollar is to first get into (or already be in) a strengthening dollar. Think exter pyramid and JP Morgan's (the man)... "Gold is money, everything else is credit". So if you want to maximise your gold purchase what do you do now? Be in the dollar, wait for it to strengthen, and then convert into gold. When gold starts rising again against all fiat currencies, the bottom is in. Till then - short paper PM (in dollar terms), and be long phyzz.
Au contraire, mine amee; it makes perfect sense.
"Woodrow Wilson, by signing the Federal Reserve Act and by his appointments to the Federal Reserve Board and that body’s responsibility for financing the First World War, as well as Wilson handing over the United States to the immigrant triumvirate during the War (his campaign backers, Paul Warburg, Bernard Baruch and Eugene Meyer), made him appear to be the most important single effector of ruin in American history.” –Eustace Mullin, Secrets of the Federal Reserve.
The ruination, of course, has not ceased. Now we have Federal Reserve operative, Jared Bernstein, preparing American citizens for the demise of the dollar as the world reserve currency in order to usher in the Fed’s long-planned international financial reserve currency based on Special Drawing Rights (SDRs), to be issued by the International Monetary Fund.
That should do away with all globalists' fears over the BRICs bypassing a cross-rate with the US dollar, constraining them to borrowing in the international capital markets, i.e., free to borrow from the international bankers if they follow orders from the new Bank of Issue.
In the “new world order” of things, there is to be no independent fiscal activity of nations. And that means you, America.
But maybe there’s hope for sovereign America to break her chains of enslavement to the Fed AND its SDRs, not coming from Washington but from Russia.
Brother Nathanael Kapner wrote recently:
“The key that unlocks Jewmerica’s agenda to foist a war with Russia on Germany and the rest of Europe is its fear of Putin’s New Silk Road joining Germany and China through Russia.
“This portends the end of the Jew-enabled dollar as the world’s reserve currency.
“With Germany trading in the Yuan and the Ruble it’s bye-bye Jewmerica with its rule of the dollar soon to be dethroned.
“NATO is ‘good Jewish business’ but the store is about to have a clearance sale.”
http://www.realjewnews.com/?p=962
superb +1000
He also had academics ousted for heresy, and letters opened, and built a domestic surveillance operation. For a man educated in Germany he certainly knew how to build the control society
He also created an income tax.
And created World War II and Nazi Germany.
"Can't figure everything out" I guess.
I'm using Bitcoin and to a lesser extent silver for my reserve currency.
If new BRICS financial system considers debt to be an asset, it will be no better than the western system (where debt is the #1 asset).
Currency backed by debt is the biggest banking scam of all time. But the entire western financial system is built on it.
Only democrats think debt is an asset.
"It is only an asset to the extent to which it can be shorted to raise capital." Other than that it has to be repaid...either in the form of interest or taxes.
To be really contrarian, I'll argue that only Jews and Christians think that Debt is an aset.
But, like I said earlier today, the minute you buy into the whole OT Genesis thing, you bought into Debt (Sin) and Agents, Brokers, and other Middlemen (Rabbis, Priests). As above, so below, you shagged out sheep.
You have eyes, but REFUGE to see.
Henry Kissenger's new book is diving on amazon. Should he use Alibaba to pitch the new book sales? This immensely stupid fuck created the petrodollar recycling ponzi fraud.
Good luck selling your new book regarding the New World. Just die asshole.
not immensely stupit, immensely evil, the stupids are bying his book/schict
to which one can only add, painfully, and slowly. may it please God.
This is what I call "writing to according what ones readership wants to hear".
All of you sheeple should better start reading Martin Armstrong. So you finally recognize this nonsense of "dropping the dollar".
It is neither in the interest of Russia, nor of China nor of somebody else to kill the Dollar - as that would mean nothing else but WW and total Chaos. Aside of the fact that there is no other currency anywhere strong and trusted enough to replace the Dollar holdings.
So this is nothing but fear mongering and licking ones readerships @sses.
Even to the opposite:
We all know very well that Yen and Euro over the long run are going to be toast. We all know that the Rubble or the Real or the Yuan or whatever else currency you name - in comparison with the Dollar is just a joke.
That aside of the fact that due to increasing US rates the money flows are clearly INTO and not away from the Dollar. And that is not to end anytime soon.
You sheeple better get ready for Dollar : Euro parity again.
Aside of SnP > 3000 in the next 1-2 years.
Money flows is what matters - not noise and hyping.
And of course there is a trend to diversify and not only hold everything in one bag. From J6P up to Putin. It's just normal - especially in the case of being attacked and threatened by Europe and America. Of course they try to diversify - BUT everything beyond that is just sheer stupidity.
But the sheeple is sooooo easy to manipulate - so me wonders nothing anymore.
The same for ekm: for how long is he calling for a triple lehman event? 2011? Three years wrong in a row?
And still the - sheeple - cheer. Just curious. Or not.
No wonder the corrupt leadership around the globe remains in power for as long as they want. No matter how often they lie or cheat or steal or lead the sheeple to war. As the dumb and fat sheeple have ultra short memories and elect them Prostitutes and Mafia again and again and as often as there are elections.
Humans, the 0.01% as well as the rest 99.99% sheeple, are still in Stonage.
Nothing changed.
you are wrong, I have been reading Armstrong since before he was jailed, even he says the dollar will be replaced, it's just a question of when.
the dollar will get stronger, yes, maybe even below parity with the Euro, but that will signal it's final dimise.
and many here read Marty as well,
Eventually - we are on the same page. BUT that was not the point - the point is that this kind of hyperventilating articles of the Dollars demise - since years - are just misleading. Same as Obumer or Yellen or other "officials" or CEOs or ZH's endless whining about overvalued stocks - are misleading with their useless talk.
It's just hurting the dumb and clueless sheeple.
a down vote for this:
We all know very well that Yen and Euro over the long run are going to be toast. We all know that the Rubble or the Real or the Yuan or whatever else currency you name - in comparison with the Dollar is just a joke.....
usd=green toilet paper.... which is based on the nukes and on the army, which did not win a war since 200 years. The wrold should kick USA down the road. This should be a strong currency you mean?
It does not matter whether you think USD = green toilette paper. Or whatever else you think who should kick what down the road. USD goes its way - anyway. Money flows.
What matters though is whether you or other sheeple are gonna win oder loose money - based upon misleading fear mongering BS articles. If the article provide facts - yes, that is what it should be - if it's fear mongering then I call it BS.
ZH is an excellent site - and still the best I'm aware of - BUT quite obviously it has a HUGE problem with rallying stocks and a rallying Dollar. Paranoia eventually? And the truth is that in the end this hurts it's readers. Especially the newer ones - as it creates sentiment to go against this "insane unsustainable from fundamentals disconnected (really?) trends".
"Idiotic rally in stocks" means: you are an idiot if you long it. Not? So you are just waiting for the right time to short.
Fact though is the opposite: to go long would have been smart. Would have made money. A lot. You should have just waited to go long at the right time - instead of short - and against the prevailing trend.
In the meanwhile SnP has more than tripled since the lows in 2009.
So there you have it again: the sheeple being mislead.
Though the sheeple still keep worshipping.
So they are still stonage sheeple.
Why? This huge comment and nothing is said and nothing is answered and nothing is nothing...
Why?
The dollar is just a paper/cloth piece of nothing and when someone can tell me why nothing is important, then maybe we will have something worth something...
We can make monopoly money our world currancy and it would be worth the same, just because...
So "Why" does it have to be the way it is?
I think salt by the single gram is worth more than a piece of paper that we say is worth a dollar. The salt is needed for life at least and without salt we die...
That is a fact.
So WHY? Because you say so?
Right on Grouchy Bear. I think that poster wants to pick up as many pennies as he/she can before the steam roller gets here and is telling readers that Tyler should stop screaming about the steam roller coming so they can get some pennies in their pocket.
"Aside of the fact that there is no other currency anywhere strong and trusted enough to replace the Dollar holdings."
Gold backed Yuan. It's coming and it will be the end of USD.
Right after they de peg from USD and create property laws and dismantle communist party rule.
As an alternative "they could kill Americans." That's why we have Democrats of course. On the other hand "America" itself is very far away.
Plus we're in Russia's back yard right now. Or is it Germany's?
Or could it be, as James Rickards postulates in his "The Death of Money", that the corrupt kings will play this out to the end, then devalue each their own and institute a worldwide IMF SDR reserve "trade only currency" for their benefit? And the prols will cheer (not that they know, care, or could do anything about the cost of their next IPhone) and their whole country sinks like Detroit. But mis-played or out black swaned = a very big shooting war between broke nations.
Well, it's been a hell of a week. I have a certain amount of sleep deprivation from getting up at 3am. for the morning markets and monitoring everything from 30yr. T-bonds to Feeder Cattle; and my firm conclusion is; I don't have one fucking idea what's going on.
"Well, it's been a hell of a week. I have a certain amount of sleep deprivation from getting up at 3am. for the morning markets and monitoring everything from 30yr. T-bonds to Feeder Cattle; and my firm conclusion is; I don't have one fucking idea what's going on."
@ SAT 800,
no offence it's just rather funny, and also partly mixed with irony, to read your post above... "I don't have one fucking idea what's going on"
Yeah, i have no clear idea what will happen either, and i don't wake up at 3am... but for sure i opt to stay away from usd :-) pm is still the 1st choice, mixed with other real/physical assets; and for cash, just keep some in local and some in certain major currencies from any significant/big economy, anything not coming from debt-sinking economies....less pauperization, just life made simple and live modestly
Well, SAT 800, i empathetically suggest u to make up your sleep before any sickness is chasing
Oh yes, honest, wise and virtuous Russians, champions & guardians of liberty, freedom, justice, fairness and equality, PLEASE do spend all of your reserves buying the debt of the BRIC countries, and as much of the PIIGS as you can too - PLEASE !!!
Listen Cancer. What you fail to mention is the giant "CIRCLE" jerk of Sovereign Debt issuance. They all buy each others debt at the orders of the great "CENTRAL" banks.
It works until "PROMISES" are broken. The promises that the USSA issues. And then on top of "SPITTING" in the face of, you turn around and "POKE" the fucking bear.
You do realize he's a fucking Grizzly, yes?
Maybe our hero "VLAD" sings this with his morning coffee?
https://www.youtube.com/watch?v=Edwsf-8F3sI
Russians are always in the wrong in your book and Americans always in the right. Must be comforting
This is focusing on details. In the final analysis, without a substitution for fossil fuels, we all are going down the tubes (Russia and China too) fighting each other for resources. Which turd flushes last is what is being quibbled about here.
Woosh! The handle has already been turned.
Listen.
http://freesnowden.is
Remember 911? No! Remember what Edward did for you Americans!
5. POLYGRAPH. Under certain conditions, DoD Components are authorized to use polygraph examinations to resolve credible derogatory information developed in connection with a
personnel security investigation; to aid in the related adjudication; or to facilitate classified
access decisions. The conditions, requirements, and limitations associated with polygraph use
are prescribed in DoDI 5210.91, DoDD 5210.48, and DoDD 5205.07
Trust NO AMERICAN CITIZEN. The war has begun!
“I don't want to live in a world where everything I say, everything I do, everyone I talk to, every expression of creativity and love or friendship is recorded.”
– Edward Snowden
“Always eyes watching you and the voice enveloping you. Asleep or awake, indoors or out of doors, in the bath or bed- no escape. Nothing was your own except the few cubic centimeters in your skull.”
? George Orwell, 1984
“He examined the chess problem and set out the pieces. It was a tricky ending, involving a couple of knights.
'White to play and mate in two moves.'
Winston looked up at the portrait of Big Brother. White always mates, he thought with a sort of cloudy mysticism. Always, without exception, it is so arranged. In no chess problem since the beginning of the world has black ever won. Did it not symbolize the eternal, unvarying triumph of Good over Evil? The huge face gazed back at him, full of calm power. White always mates.”
? George Orwell, 1984
“Suddenly they were both leaping around him, shouting 'Traitor!' and 'Thought-criminal!', the little girl imitating her brother in every movement. It was somehow slightly frightening, like the gamboling of tiger cubs which will soon grow up into man-eaters.”
? George Orwell, 1984
“Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power."—George Orwell
Funny. Young Orwell looked a lot like Snowden. But Orwell's narratives are fiction. Snowden's accounts are real.
Listen JR.
You are a good guy for sure.
One question that riddles me to no end. Why does life "IMITATE" the worst kind of "ART" that has ever been created?
I think it might have something to do with the Holly-weird guys.... Get it?
A young minister I heard speak was called out one Sunday morning to substitute at a tiny church in rural New Mexico. Following what he hoped was the right direction, he was traveling down a hot little dusty road that seemed to go nowhere, getting dirt all over his white car while dodging pot holes, his suit growing limp. Not another car or person in sight. Hot and growing lonesome, he eventually became a little depressed.
Just look up there on that highway, he thought. Cars and people everywhere, excitement, things happening … What am I doing down here going to a little church where there'll probably be only six people?
And then enlightenment hit him. That was the Broad Way. He was traveling the Narrow Way...
"Enter through the narrow gate. For wide is the gate and broad is the road that leads to destruction, and many enter through it. But small is the gate and narrow the road that leads to life, and only a few find it.” Matthew 7: 13-14
I get it, Bangalore Equit... It’s the old story of Pilgrim’s Progress, I guess. But in the end it’s a fulfilling journey, at least for me, no matter how rough the road….
"[We would like to] walk away from investing in papers of the countries that impose sanctions against us," Mr. Siluanov said, adding that the reshuffle would be carried out gradually. He didn't elaborate on when the first purchases of Brics debt may take place."...
Well Yeah!...
I guess I'd want to "walk away" as well when my territorial integrity has been violated in every way imaginable over the last 20 years with terrorist "proxies" organized through Western government(s) that have killed my people both inisde and outside my border(s) along with those "sanctions"!...
Another government clown suit.
Talk about writing on the wall... rip US $