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Gold, The SDR, & BRICS
Submitted by Alasdair Macleod via GoldMoney.com,
Last Monday there was a meeting in Washington hosted by the Official Monetary and Financial Institutions Forum (OMFIF) to discuss the future relationship, if any, of gold with the Special Drawing Rights (SDR).
Also on the agenda was the inclusion of the Chinese renminbi, which seems certain to be included in the SDR basket in this year's revision, assuming that the United States doesn't try to block it.
This is not the first time the subject has come up. OMFIF's chairman, Lord Desai wrote a paper about it after the last Washington meeting on gold and the SDR exactly four years ago. The inclusion of the renminbi in the SDR was rejected in 2010 because of inadequate liquidity and is due to be reconsidered this year.
Desai pointed out in his paper that there are difficulties when it comes to including gold, because (and I think this is what he was trying to say) none of the SDR's paper constituents are convertible into gold, but gold's inclusion in the SDR would make them convertible through the back door. However, Desai seemed keen to re-examine the case for gold.
It should be pointed out that if gold is included in SDRs the arrangement cannot be long-lasting so long as the major central banks insist on printing money as an economic cure-all. However, China's position with respect to gold and her own currency could be a different matter.
The Chinese government has almost certainly accumulated large amounts of gold yet to be included in her reserves, and she has also encouraged her own citizens to own gold as well. We can therefore be certain that China sees a monetary role for gold while at the same time she is pushing for the renminbi to be included in the SDR basket. There is no doubt, if you read the IMF papers from the last SDR review in 2010 that the renminbi does now fulfil the criteria for inclusion today. So the question then is will the advanced nations, which dominate the IMF's membership, permit the renminbi's inclusion, and will the US, which has dragged its heels on giving China and the other BRICS nations a greater shareholding in the IMF, relent and permit these reforms, which were accepted by the other members back in 2010?
The Americans' blocking of reform signals her desire to preserve the dollar's hegemony; but given she lost out spectacularly over the creation of the Asian Infrastructure Investment Bank, IMF reform could become the next serious threat to the dollar's dominance. And if America does not back down over the IMF and the SDR, she will have no fall-back position; China on the other hand still has some aces up her sleeve.
One of them is gold, and another is her role in a rival organisation established by the BRICS. The New Development Bank (NDB) is in the final stages of being set up, driven by frustration at America's attempts to protect the dollar's role and to keep the IMF as an exclusive club for advanced nations. Instead, the NDB could easily issue its own version of the SDR with the gold lining Desai referred to in his original paper.
The reason this would work is very simple. The BRICS members, unencumbered by the cost burden of modern welfare states could exercise the monetary restraint required to tie their currencies to gold, perhaps running a Bretton-Woods-style gold-exchange arrangement between member central banks to stabilise their currencies.
However, the NDB would almost certainly want to see the gold price considerably higher if it is to play any part in a new rival to the SDR. Other BRICS members would be encouraged to make sure they have sufficient gold on board by selling US dollar reserves to buy gold, ahead of any decision to go ahead with a new super-currency.
It would appear the era of the dollar's global domination as a reserve currency is coming to an end, and the stage is now being set for gold to be officially accepted as the ultimate reserve money once again, this time by the next generation of advanced nations.
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I am not against owning physical metal; that cannot "hurt", but it is not the future--
The basic gold standard never left. That's the one that says it has value relative to debt/cash. It cost $20.67/oz. when FDR went into office. The middlemen, aka the banksters, have fooled everyone into thinking gold no longer has value. If that's so, there shouldn't be a 'Gold King' store buying gold in every town!
The only way gold can ever lose it's status is if every last drop of savings are stolen from people. There will always be 'side' transactions. See prostitution, for example. It never went away, but it was mostly 'institutionalized' by the state also;
http://en.wikipedia.org/wiki/No-fault_divorce
Won't stay on if the networks become compromised and/or the users, customers, decide they can't tolerate digital currency anymore.
It would appear the era of the dollar's global domination as a reserve currency is coming to an end, and the stage is now being set for gold to be officially accepted as the ultimate reserve money once again . . .
It's about time!!!
The USD beast has a long time to go before it is replaced (7-15 years) in the way it is perpetrated apart from some global catastrophe, which is possible. Gold will NEVER be a reserve currency because globalism is about corruption, mankind is corrupt to the very core and a real gold standard would "get in the way"; therefore the digital "currency" will be the new standard with perhaps a facade of some "gold back".
Dream on buddy.
Gold is for them, fiat is for us.
Liberty is a demand. Tyranny is submission.
All that glitter is guillotines.
"All that glitter is guillotines"
that is poetry.
The SDR Basket (not GOLD backed) has been part of the US plan for a long time. It allows the US to kick the can to another FIAT financial system. Each time the US does this it avoids the need to declare itself insolvent. Or call for a digital currency which is why the recent media blitz wanting to eliminate cash & what they wanted to do w/ RFID / Bio-Metric's / smart meters etc. agenda. Crunch time, a War(s) or collapse the economy w/ suspended elections or let out more suffering & roll out more Eco -Terrorism ?
Exactly, plus that gives them to data to "manage" the economy.
With the Lords of Finance and Economics at their "rightful" place at the top of the heap of humanity.
If we went to a digital currency only how would congressmen be bribed?
property, cars, insider trading on stocks, country club memberships and of course, promises delivered later for future jobs once they "retire" from politics
The they announce the alternate on Oct 20,2015 a surge of US dollar selling will begin. There is no more can kicking
USA fights for one thing only. Power.
The more they fight, the more people hate their government.
It is a losing battle.
Good insight, but it goes higher than that.
The DC US is being plundered and controlled from a abroad , by foreigners.
Some of those foreigners live amongst the American people, but are not of us.
These foreigners rob us via printed fiat from the FedRes. Some of that lucre is then used to payoff the DC US pols, crats, and funcs to oppresses us, and to be their war dog overseas.
Liberty is a demand. Tyranny is submission.
What are the hens doing in the duck pond?!
If by foreigners you mean people who put their own interests ahead of their country, maybe.
But there is nothing about being a citizen or not being a foreigner that restricts plundering.
I think he's referring to those who put their ethnic interests ahead of the country they live in and claim loyalty to.
Right. Deuteronomy 23:19-20
19 Do not charge a fellow Israelite interest, whether on money or food or anything else that may earn interest. 20 You may charge a foreigner interest, but not a fellow Israelite, so that the Lord your God may bless you in everything you put your hand to in the land you are entering to possess.
I didn't make it up. It's Biblical Law.
The SDR has two goals:
1) Plunder: Continued theft from the people
2) Slavery: Continuity of prior debts. Prevents prior debts in other fiat currencies from being discharged in those worthless currencies.
Liberty is a demand. Tyranny is submission.
Guillotines the only solution.
Could it be that the Remindi is gathering gold just in order to improve it's respectability coefficient. That would be that their goal is inclusion in the SDR not putting gold in there.
That allows China to be just as bad as the other Fiat Central Banksters is letting the SDR be the dream Fiat, where the Race To The Bottom is coordinated and balanced.
That is exactly what the US tried to coordinate in the recent crash.
With the SDR Fiat, it just happens without the risk of any country pulling a Switzerland.......
At present as best as I can muster, I have only one fairly confident conclusion - Au and Ag are going to get violated to the downside and long-standing 'resistance' is going to get powdered like the Maginot Line. I am staying my hand, holding fire, keeping dry powder. The Ag chart is especially breathtaking in its thin-iceness.
One morning we will all wake up and "Whoomp they it is" Silver will be down another dollar. Coming soon.
Doesn't matter. What matters is the day when prices for food are in grams of silver, not fiat currency, and if you have no metal you go without.
China should demand gold or gold backed letters of credit in exchange for merchandise and they will get it as their products are cheaper. The common denominator is what currency you accept?
If you have a Diners Card and it is not accepted... well no deal... same thing with gold
yes, China should kill off all of their markets in one fell swoop by demanding gold LOC for their goods...
I hope they do it... the crater they'd make in their economy would be viewable from orbit
Ok. But what if the IOUs they're getting instead turn out to be worthless?
they must be getting something for them or they wouldn't keep taking them... food for thought
TODAY, not assured for tomorrow.
It seems to me that the real story here is the utter lack of any democratic input into this discussion. A tiny cabal made up of people whom no one has even heard of, not to mention voted for, meets to chat over the next monetary regime that they think best to impose upon us proles.
Why wait for “them” to do it.
Every man on the planet has the same power American Founders had. The problem is that hardly anyone today knows of this power.
http://www.voltairenet.org/article187306.html
long yuan
If anybody thinks gold can't be manipulated by the bankers to the same extent they can with present criminality, they don't appreciate the extent of the financial scandals and the manipulation that was going on, when the gold standard was used.
How do you think Reagan (in "The Speech") in the 1960's, was able to correctly say that the 1960's dollar, was worth 40 odd cents compared to the 1939 dollar? If gold ISN'T just as fiat as everything else, how could the dollar possibly have lost over half its value in under 25 years?
Stop being irrational and over trusting.
Debt ultimately drives the prices.
http://2.bp.blogspot.com/--aof8hMDldM/T0rf-9FG-yI/AAAAAAAACko/WYAieKTlmy...
http://qzprod.files.wordpress.com/2012/11/debt-and-gdp-main6.png?w=1024&...
THE KEY: use the metal, not paper promising the metal, every single day. Be it silver, gold or copper, use them for food, rent, bills, cabs, bus, whatever.
Funny that Lord Desai has not considered the possibility that the SDR itself will be made obsolete by a competing marker for international trade, issued by the AIIB, and fractionally backed by our favorite metal.
The ask for inclusion of yuan in the basket has become less of a "please, sir?" and more of a "do it or else".
Or more like, "Why wouldn't you include the yuan when all the other fiat currency is just as shit worthless?"
EWI shows that whilst central banks are net buyers of gold, the price of gold goes down, but at its bottom central banks were net sellers of gold. (eg/ gordon brown, BoE). right now central banks are net buyers of gold
You know, the favorite interest rate of a borrower is 0%
The favorite interest rate of a saver today likely around 30%
The favorite price of gold if your buying... as low as possible...
Your surprised by any of this???
I'm confused. China is the world's largest producers of gold, none of which is exported. They reported owning around 1K tons in 2009. Speculation is they now hold 3K+ tons....which come October..they'll verify. The US supposedly has 8.3K tons of gold. That gold plus the stored gold held in the USA for other countries has been advanced and reborrowed so often no one has a clue. But then again it was done on purpose so as to suppress gold to retain the dollar as the reserve king.
So, China has kept their thumb on their population and they've buddied up with Russia. The US via Obama has pissed off just about everybody. China forms the AIIB as a competitor to the IMF. US allies don't see much value in staying in the corral with the US so they bolt to the new bank. Next step....kick the dollar to the curb and replace it with a basket with gold backing. The US can't show its hand on gold cause that would require an audit. Any temporary discomfort in China can be handled easily by their military. The US population will revolt because they have been spoon fed (entitlements).
So here's my confusion. Why are so many countries still investing in US Treasuries? China still holds $3T of US debt. If the dollar is going to slide why invest in fiat? The 10 year is at 1.9%..? Doesn't make sense.
http://rt.com/business/250149-japan-debt-holder-us/
It seems that China is reducing its holding at a measured pace .
Makes sense to this peasant.
You are not alone. A lot of people are confused. They are trying to sell their Treasuries in small amounts so as to not trigger a panic sell on a worldwide basis. Also, be careful about giving the US Treasury 8.3K tons of gold. About 20 years ago, it changed the first line on its asset statement from “gold” to “gold and gold swaps”. Several sources estimate that 30% to 80% of European and US Treasury gold had been taken away by the so-called gold carry trade.
What a surprise we should expect.
http://www.zerohedge.com/news/2014-11-09/china-aims-official-gold-reserv...
Kkkkkkkkkkkkkkkkkkkk!
If you write "BRICS" in the middle of a recipe and post on his personal blog appears a lot of Troll!
Hehe.
This is why I tell my friends not to do Ketamine. ^^
Better than bute.
“It would appear the era of the dollar’s global domination as a reserve currency is coming to an end, and the stage is now being set for gold to be officially accepted as the ultimate reserve money once again…”
I agree, sort of; and disagree, definitely.
My “sort of” agreement pertains to gold’s role as a reserve medium: it is currently “the ultimate reserve money”; as in now, today, and for the last 100 years.
If you will search for any central bank (or “national bank”) annual report, you will find “gold” as the first line on every asset statement of those central banks. Actually, this pertains to former times; they all changed, about 20 years ago, the term “gold” to “gold and gold receivables” (the US Treasury, to “gold and gold swaps”).
You will also find, on their liability statements, the items, “bank notes” and “bank reserves”.
This means that “gold and gold receivables” were purchased by those central banks AS AN EXCHANGE for newly-issued “bank notes” and “bank reserves”.
This makes “gold and gold receivables” the “ultimate reserve currency” (since it is always listed first on asset statements): that is, the collateral for liabilities on central banks’ financial statements.
PLEASE NOTICE: this is past and present tense: not future tense.
Now, my definite disagreement: No, the BRICS operation does not represent the end of dollar domination as a reserve currency.
The reason is because a large fraction of “bank notes” and “bank reserves” of every member of BRICS is issued IN EXCHANGE for dollars (in the form of US Treasury securities). In other words, such bank notes and bank reserves are mainly collateralized by dollars. Thus, if the dollar is a house of cards, those other currencies are built on top of a house of cards.
As of Jan 2015: China held $1239.1 billion of US Treasuries; Japan: $1238.6 billion; European Union, $1.1 to $1.3 trillion; Belgium: $354.6 billion; Caribbean Banking Centers: $338.5 billion; Oil Exporters: $290.8 billion; Brazil: $256.7 billion; UK: $207 billion; Switzer: $205.5 billion; Hong Kong: $172 billion; India: $91.2 billion: Russia: $82 billion; among many others.
Of course, these amounts do not reflect private foreign holders as nominee holders for such central banks.
With such large holdings of US Treasuries, they are trapped; they can’t let go. If any of them give signals that they plan to disgorge such securities in any but trifling amounts, it will trigger a panic sell of US Treasuries that would drive the dollar to zero within hours.
Such a result would wipe out half their (central banks’) collateral; and, thereby, destroy their banking systems.
Let them create their “alternate” global reserve currency – even if it’s called an SDR . It will still be built on top of a house of cards: the US dollar.
Nothing will change… people will get that warm and fuzzy feeling that “something” is being done to correct an evil… Judeo-Bolshevik bankers and munitions makers will buy another day to plunder the earth to a Stone-Age condition… until the dollar is inflated to zero. Then we will discover if there is any gold left at Fort Knox.
With such a prospect, you’d think that someone would take measures to create an alternative currency… apart from criminal and useless classes, of course.
That's why China is stashing real gold while slowly dropping US debt.
“Guillotines the only solution.”
As “kshrisc” so subtly expressed it.
It’s really a bad solution; for, it would put them out of their misery too quickly. I would prefer to watch them suffer as long as possible.
In the meantime, and a much better solution would be to investigate and recover the booty they took. Keep them alive and do this recovery… watch them suffer.
Certain "Events" were set in motion long ago. All that is left is to just wait and see how it plays out. These "Events" often backfire and seldom work out as planned, or perhaps they do work out in the original planners minds? The agreement to accept the $USD as the "Global Reserve Currency" at Bretton Woods set in motion the eventual collapse of the $USD, as is obviously "playing out" now, some seven decades later, no? They did not necessarily plan the ending of the "GRC", but they were certainly not so foolish as to believe that it would not eventually come to an end just as all previous GRC's had.
It appears to me that the End Game for the $USD is coming down to the question of whether the "Nuevos Dolares" are strictly digital or another form of "Currency", (SDR's, Yuan, Gold, etc.)... Of course digital means Total Control and Loss of what Freedoms we have left, but I doubt very much that our Tyrannical Overlords will be able to turn US into N. Korea. If the situation becomes unbearable the people wll turn to barter, or "officially banned" use of "junk silver" or even copper? The copper "Pice" minted in WWII India, holed in the middle worked fine as a penny or a washer!
The Bretton Woods agreements did NOT establish the US dollar as the "Global Reserve Currency." On the contrary, it established a regimen of fixed rates of exchange in whch the dollar was only one participant, with the settlement of trade imbalances in gold. With its large trade deficits, the US was rapidly losing its gold under this arrangement so that in 1971 president Nixon refused to settle the US trade deficit in gold, insisting that all countries accept US dollars instead. It was at that point that, by default, the US dollar became the de facto global reserve currency. This situation was never ratified by any international treaty. It was simply a practical way to overcome a seemingly intractible problem, and so it has remained since.
There are a few misconceptions reflected in the comments below that I will attempt to clarify:
The AIIB that is being promoted by China, and which has been seconded by many other countries, including several advanced economies, is not foreseen as a rival to other international banking institutions, least of all as a rival to the International Monetary Fund. Its full name is the Asian Infrastructure Investment Bank. It is being proposed as a supplement to the World Bank (formal name: International Bank for Reconstruction and Development) and the Asian Development Bank. I have no doubt that the new AIIB will operate in US dollars, along with the Yuan the Ruble and the Yen, and eventually with SDR's (Special Drawing Rights of the International Monetary Fund). The IMF is currently the only international banking institution which attempts to maintain exchange rate stability and the funding of trade imbalances, and no other international banking facility is proposing to share or replace that responsibility.
The SDR was originally proposed in the '60s as a way to expand the credit-forming role of gold. Some actually called it "paper gold." (At that time, such a designation did not have the negative connotation of its present usage in the gold market.) It was recognized that the current supply of gold in the world was not adequate to perform the trade balancing function. This may not have been a correct perception and it was dependent on the continuation of a fixed exchange rate regimen. But even during the period of Bretton Woods supremacy - 1945-1971 - many countries obtained changes in their rates of exchange in collaboration with the IMF. In 1971 the US went off the gold settlement system, without the collaboration of the IMF, thereby forcing all other countries to accept the US dollar as the pre-eminent international currency.
For the audio (mp3 or YouTube) and the graphics in the original story but not below, click here for the original.
My thesis on the sequence of events and rough timeline on what will end the precious metals bear phase + blockbuster evidence re. a fire burning in the European derivatives market via Dave Kranzler. This was probably our best show all year. -- Eric Dubin
# # # #
Fund Manager: Smoking Gun Evidence That Derivatives Melt-Down HAS BEGUN Behind the Scenes!Dave Kranzler published a grand slam article last week (click here). Doc and I were happy he could join us to discuss what I consider to be smoking gun proof that there is a low grade fire burning in the derivatives market, and it could flare-up into a crisis at any time. You owe it to yourself to read the article, and for more context listen to our discussion.
I forgot to mention in the podcast one additional point: ECB’s launch of QE would make a rather convenient compliment to any massive swap line that might have been launched between the Fed and the ECB back in that suspect mid December, 2014 period when all this Reverse Repurchase Agreements (RRAs) action was going on to stuff collateral into teetering European banks. Bloomberg News filed Freedom of Information Act requests on the Fed and ultimately had to sue to find out what the Fed did during the financial crisis. The Fed flipped Bloomberg the bird, but Bloomberg News won their court case.
That effort, combined with information that came from the very limited audit conducted as a result of Congress getting off their arse and passing Ron Paul’s last “Audit The Fed” bill submission revealed nearly 17 trillion dollars in swap lines and backstops that the Fed initiated. For example, the Fed “printed” dollars, the ECB “printed” an equal value of euros, and the two institutions swapped the digital fiat currency in a clandestine operation to not only hide the effort to float European-based banks, but to dampen the impact of relative debasement of one currency versus the other — debase both by the same amount at the current exchange rate and the impacts to the exchange rate is dampened.
Who knows if there were massive swap lines on top of RRAs last December. It wouldn’t surprise me in the least. Nevertheless, this is total speculation on my part and I have no way of proving it, and I don’t have the deep pockets of Bloomberg News to sue! But I encourage researchers to steal my theory and investigate because it would make sense that swap lines were used in addition to RRAs last December. Western central bankers exercise extraordinary coordination amongst themselves.
It just never ends. The latest? Talks between Greece and the Troika fail, which in a world with normal economic dynamics would have increased demand for gold on Friday. Instead, gold and silver were smashed. To add insult to injury, we have yet another example of in-your-face algorithm driven trading. Just look at the match on Friday’s trace pattern going into the London close with Wednesday. One match like the above doesn’t prove anything. However, these type of echo matches over different trading days have been happening at least once per week for every week going back to at least as early as 2004.
Thankfully, if I’m correct, we’re going to see a steak driven into the heart of the precious metals bear this summer. I believe China will declare she has gold holdings below 4,000 but above Germany. My best educated guess? Look for 3,900 metric tonnes to be declared versus the last official figure of 1054.6 metric tonnes declared in 2009. The 3,900 figure will be well below what the Chinese government holds, never mind the massive pile Chinese citizens now control. Alasdair Macleod has published publicly the very best work on what China might hold, documenting his assumptions and spotlighting key historical events (e.g., see here, here and here as examples). 25,000 metric tonnes? It’s possible, reasons Macleod and I agree.
In any event, the mainstream financial world is too busy sucking on the teet of the World Gold Council and GFMS to recognize what’s going on in China. This announcement is going to come as a major shock that will compel a percentage of the mainstream financial world to second guess their assumptions, leading to an elevated bid for gold from money that is otherwise indifferent today.
China will seek to declare part of her gold holdings in order to add credibility to the renminbi, which in turn will be critical to help China secure placement within a reorganized SDR basket at the IMF. Make no mistake and don’t get hung-up on whatever you might think about Jim Rickards. China wants this to happen and many top political and academic leaders in China have said as much in the media and within policy papers (e.g., see here for just some of the documentation). The majority of IMF member states want this to happen and IMF president Lagarde said last month regarding renminbi addition to the SDR basket: “It’s not a question of if, it’s a question of when.” China needs the inclusion of the renminbi to the SDR basket because she will likely not have fully liberalized her capital account in time for this fall’s IMF meeting, and it’s also very unlikely that the renminbi will be aloud to float freely against the dollar (but I do expect the trading band to be expanded yet again before the IMF meeting). Nevertheless, the IMF reorganization meetings occur only every five years, and the need to act this October is considered important and necessary given the desire to create a new “liquidity pump” to address the continuing rot in the global financial sector. Western central bankers and even a percentage of American interests want this new tool. So, get ready for “IMF QE.” It’s coming. But first, given that China will not fully meet all the requirements for renminbi inclusion into the SDR basket (free floating currency, liberalized capital accounts, etc.), she’ll try to more than make up for it by dropping a bombshell about her gold holdings.
I’ve been talking about this thesis for a few months on Silver Doctors, and on various podcasts elsewhere. It looks like some of the mainstream financial world is catching up and catching on as well (e.g., click here). But very few people have connected the dots to see how and why this chain of events is going to put an end to this precious metals bear market. Sure, the cartel will likely come back after precious metals settle down at a MUCH higher baseline trading range and fire-up aggressive management once again. I expect as much. But if my theory is correct, gold and silver investors are going to be smiling regardless.
Listen to our podcast for more context. I also joined Dave Kranzler for a conversation with Rory Hall and we discuss this topic along with a whole host of other juicy stuff. Look for that to be released around Monday. Rory has his editing work cut out for him. We recording nearly two hours worth of material!
Worthy Links For The Weekend:
Also, visit Dave Kranzler’s website, Investment Research Dynamics.
Thanks for tuning in! – Eric Dubin, financial and global macro analyst and managing editor, The News Doctors.
Only one comment on a very good post:
I do not see why the existence of exchange rate controls or capital movement controls would disqualify China from being included in the SDR basket. Such restrictions existed in the pre 1971 IMF and were not considered disqualifying in the IMF's regimen of trade balance adjustment at that time.
So Oct 20th is the date. Or some where close to that
The first post Ham-Bone's chart link is screaming inflation hard core!
The progressives are pushing for the US dollar alternate reserve currency. With dear leader still in the house they know their days are numbered in there attempts to remove the US as a world power.
Alisdair Macleod, of the clan Macleod, always an astute observer and communicator. There can only be one.
Trying to catch breath! All jewdom ROTFLOL!! Kosher propaganda says “gold ultimate reserve once again”. Oy vey!!! The US dollar is ultimate ‘money created out of thin air’. Jewdom’s usury system never give that up. Never! Why? It costs us NOTHING! We create debt that never can be repaid. You stupid goyim love our gentle chains of subtle slavery. Kosher whim make gold go up, make gold go down. Is like pump sucking your wealth, sucking your labor. Gold soon under $900. Stupid goyim such good compliant cattle.
You are an idiot. The United States of Israel's favoured currency is DOLLARS because they can't control GOLD worldwide.
BRICS members, unencumbered by the cost burden of modern welfare states could exercise the monetary restraint...
You're kidding, right? How many sovereign defaults have the BRICS collectively had in the past 50 years?
Anybody remember hyperinflation in Brazil and demonetization of The Real back in '89?
http://www.sjsu.edu/faculty/watkins/brazilinfl.htm
Was that default before or after CIA intervention. I know the CIA has disrupted a few countries down there. I know the Chicago boys- Friedman's followers- were kicked out of a country or two down there. I know Bechtel Corporation was shown the door for screwing up a water project. I know Chevron is or was fighting tooth and nail trying not to pay for clean up in Ecuador.
The point being the BRICS have been f***ked over enough by the USA. What the USA has not realized is that these are not the backward countries they once were. After getting screwed over they have learned their lesson. Don't trust the U.S., the U.K. or the E.U.
More power to them. Too bad U.S. citizens don't follow their lead and get rid of their financial institutions and replace them with something that actually is interested in serving the citizens and not amassing a $24 million a year paycheck. Poor Jaime Dimon only gets $20 million. Blankenfein has got him beat by $4 million.
I completely understand the problems with and antipathy toward fiat currencies in general.
I get that there is a large segment here on ZH who believe that gold and silver are the only true stores of monetary value, and there are also many who have a vested interest in making it so.
However, I do not understand how it is possible that we are returning to a worldwide gold standard, now or ever in the future. It is just not practical for the lightening speed at which modern commerce takes place.
Here in Canada, a major gold producing country, our Central Bank dumped almost all of it's gold years ago. There is zero talk of reversing that trend.
Mark Carney, our former Central Bank Governor and now the Governor of the Bank of England, is also Chairman of the Financial Stability Board. I would wager if you asked him if he foresees that gold will have a significant role in a "post USD" global financial structure, his answer would be a curt "no".
"It is just not practical for the lightening speed at which modern commerce takes place."
It is in fact very practical: the higher speed isn't actually helping the economy, it's helping mask fraud which robs us all. By removing the fraud we actually get richer. Add to that the quality of currency itself will be higher. Add to that: there would be no central control when we actually have metal as money in our pockets.
You're far too trusting of electronic transfers and banks "holding" money.
The dollar losing its status as world reserve currency is a good think imo for the dollar.
All these currencies float against oil now, so you have everythign pretty much pegged to oil, and since all these currencies are crashing in value, the dollar is actually benefiting (looks more attractive as a currency).
Before everyone bought dollars to buy commodities, this masked the weakness in those currencies because lets face it, exchange rates are rigged for political and deplomatic purposes, causing market distortions....
Now with no reserve status, you have a more open market and the weakness of those other currencies relative to the weakness of the dollar makes the dollar look good by comparison.
once upon a time
you stacked so fine
you read zerohedge
in your prime
didn't you?
you used to laugh about
everybody that was
stacking out
now you don't talk so loud
now ya don't seem so proud
I remember seeing intelligent comments last time I was here. How this place has so quickly gone to hell,hm? Libtards roaming around unchecked... a recipe for disaster!
If China is smart, she will never accept being part of Western oligarchs' world, part of SDRs, for if she does, no matter how much "voting power" or "share" she gets there, Western oligarchs will ultimately control that currecy and they will print it as they see fit (and of course direct that printed/digitally conjured mass where they wish to). In the end Western oligarchs who control degenerate West will once again have control of all currency supply just like they did with the dollar. The whole point is to get away from Western control, and if China bends her knee, she subjugate herself thus. Remember, in the end it all runs down to who control the SUPPLY of currency, and no amount of "voting power" will ever change that. Hopefully China will be smart enough to build her own order, an order which many will cluster around trying to get away from the degenerate West. Besides, there is apsolutely no need for use of any Western currency or so-called SDRs when NATIONAL currencies do the same job of payment for international business deals as excellent as Western ones. We can all trade and prosper using our own national currencies, and not going with centralization of control under the Western oligarchy.
p.s.
Very stupid article btw. To start with, Western IMF doesn't have any gold to back anything. Perhaps they contemplate China will provide it, but they will control the supply of that currency. Arrogant thought, but certainly in line with well-known and documented Anglo-American hubris and arrogancy I'd say.
p.p.s.
Again, always remember, it all comes down to who controls the supply of such currency. It has always been about control, and there is no greater control of a society then controling the supply of its currency. Just ask Rothschilds themselves. Mayer Amschel Rothschild, in a rare moment of weakness, sincerely admitted it.
I was just looking at a 1928 $20 gold certificate I found when breaking a $100 bill at the company cafe a number of years back. That note is now worth (not including a few dollars of numismatic value) 1.67% of it's original value against gold.
http://thecrux.com/dyncontent/dollar-substitute-coming/
Now we see why Jade Helm dates et alia are significant etc.
There are no coincidences at this point.
The SDR is a basket (case) of debtor nations, all printing wildly while proclaiming risk is near zero. How does one integrate the world's largest creditor nation and come to an equitable allocation? No way. You can not add a fresh apple to a basket of rotten fruit and call it a fruit salad. As for a gold component, give me a break. The printing nations will not allow this to happen. I agree it is more likely that a NSDR (new) currency basket will be assembled over time by numerous Asian and Russian allies. Why else would they be increasing gold reserves at a hectic pace?
The US crony capitalists will be massaging and manipulating numbers for the next quarterly report while China is patiently pursuing it's 10, 25 and 50 year plans. Those same cronies will soon rationalize why the Renminbi still does not qualify for thier fruit basket.
The game is lost for US hegemony. But will the US bow out gracefully, or, will it take the world down with it? What difference is it to the loser if everyone loses? The bankster psycopaths will conjure something. We are living in dangerous times. Those who have conjured their wealth from nothing are at risk of losing everything.
Inexpensive fiat is the ONLY ethical money form for government debts. Otherwise, private interests such as gold owners and gold miners profit off the taxation authority and power of government at the expense of everyone else.
That said, private monies should be alllowed for the payment of private debts ONLY with NONE of them privileged by government. Obviously, government subsidized private credit creation, our current money system for private debt, violates this.
The solution to the "money problem" is ethics, not a shiny metal. One should be ashamed to think otherwise.
No, you should be ashamed: the only ethical money is that which is from nature because it can't be fraud. The rest is always fraud at all times. Period. And fraud is not ethical by any means.
Those who don't have access to resources, which are money, are supposed to perish and to deny this is to kill all of us in the name of false ethics.
We must never allow this.
Shame on you. There's plenty of resources to use as money for almost everyone. Only the most useless or the most idiotic insisting on living where there are no resources would suffer and should suffer for being stupid and/or useless.
Nature, bitchez: the weakest are supposed to die because this makes the species stronger and every civilization. That's actually what's ethical.