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Schadenfreude - How The US Is Helping China Create A New Financial Order
Submitted by Jeff Thomas via InternationalMan.com,
Here we have an image of a Chinese banknote, featuring Chairman Mao, followed by a seemingly incongruous German word - schadenfreude. Is there an error here?
Happily, no. We’ll begin with the word, schadenfreude, which means “harm-joy.” It’s used to express an occurrence that’s destructive, yet brings about happiness.
This would seem to be a conflict in terms, but, looked at a bit more deeply, it could be said that the killing of an enemy may mean that peace will soon prevail - and so the event brings happiness. Or, another analogy: the bulldozing of an old structure may mean that a new one - a better one - will soon be under construction.
And that’s the case here. The world’s most powerful (and most oppressive) political/economic power structure has begun to go under the bulldozer. Its replacement will hopefully be a better one.
The Brussels SWIFT system is currently the largest economic settlement system in the world. Almost all financial transfers are made possible through this system. As such, those who control SWIFT have the power to threaten financial institutions and sovereign nations that, if they don’t do as they’re told, can be denied access to the system.
The controllers of SWIFT have been far from fair in making these judgements. Much of their agenda has been provided by the Organisation for Economic Co-operation and Development (OECD), a cabal made up of many of the world’s most powerful nations, but primarily Europe and the US. The US is the heavy here and they’ve used their power to create FATCA, a means of applying draconian economic pressures on their own citizens. In doing so, they’ve also succeeded in creating a global shakedown racket aimed at financial institutions. If a bank anywhere in the world is found to have a US citizen as a client and the bank fails to regulate that client sufficiently, the bank itself is “held up” - the US imposes a massive fine on the bank.
Editor’s Note: If you have never heard of FATCA before I can’t blame you. That so few people understand what it is, is perhaps not surprising. Often, otherwise offensive government actions and institutions are given dull and opaque names to obfuscate their true purpose. Obama signed FATCA into law in 2011. To understand what this odious law that is all about, see here.
Not surprisingly, the banks of the world (other than the central banks, which are not targeted by FATCA) live in dreaded fear of making the slightest error in trying to please the US government. They’ve been learning that although FATCA claims to be aimed primarily at its non-compliant citizens, there have been other targets. The US government has used the opportunity to go after the bigger fish - the banks themselves.
Again, the reason for this success in creating this shakedown racket has hinged on US control over the levers of the international financial system - the fear in financial institutions that the US could simply end the banks’ ability to do business if they don’t pay the outrageous fines.
But this scam only works as long as there is no competitor to the US system. Should there be a free market in the transfer of money - should there be even one competitor in the world - one that does not impose economic mafia-tactics, the potency of the US’ threat would collapse. At that point, business and sovereign nations may cease their use of SWIFT and move over to the new competitor.
Cross-border Interbank Payment System (CIPS)
And here is where schadenfreude steps in. China has had their own independent settlement system in the works for some time and it has now been introduced.
But, before opening up a bottle of bubbly, it would be wise to acknowledge that full implementation may take a few years. It will begin as a means by which to settle oil and gas accounts in keeping with agreements that already exist between China and other nations. As CIPS gains strength, its use will spread outward. This is a virtual certainty, as the more it spreads, the greater the Chinese influence over such entities as the IMF.
And CIPS will not simply replace SWIFT. What will occur will be that it will be presented as a system that can work alongside SWIFT and interface with it. (e.g., if Germany wishes to have enough natural gas to heat its houses in the winter, Russia would require that the payments for Russian gas be settled through the use of CIPS.)
The final holdout will be the US, as it has so much more to lose. However, once isolated as the only country that avoids the use of CIPS, demands from China that interfacing take place will force the US to either get on board, or be unable to acquire foreign (particularly Chinese) goods.
At some point along the way, increasing numbers of the world’s banks will cease to query account applicants as to whether they hold a US passport. They will only wish to know if the applicant has access to CIPS. Over time, the FATCA shakedown will die away, as its driving force - intimidation of the world’s banks - will no longer have teeth.
Other Developments
In parallel to the creation of CIPS, China has created the Asian Infrastructure Investment Bank (AIIB). This, together with agreements with Russia and other nations (including some EU nations), has made possible the sale of oil to be settled in yuan.
The yuan has also overtaken the yen as the fourth most-used currency for international settlement. Next target: the pound, then the euro, then the US dollar.
How Will It All Shake Out?
There are two general schools of thought amongst noted contrarians and libertarians regarding China’s overriding objectives.
One school has it that China is very much a part of the One World Government philosophy and their primary goal is to acquire a more powerful seat at the IMF. Having done so, they will settle in and be content to be one of the leading jurisdictions that run the world collectively.
The other school suggests that China means to become the most powerful nation in the world - to replace the US in every way as the world’s dominant nation.
My own appraisal is a combination of the two. China’s behaviour - not only their public stance, but their massive economic infrastructural development efforts indicate to me that they intend to go full-bore with their new economic infrastructure, giving them powers that rival and even overtake the EU and US. At that point, they will be unconcerned as to whether they will be welcomed into the “club” that is presently dominated by the EU and US. They will be an unstoppable freight train passing through town. The western world can either get on board, or fall by the wayside. The Chinese will prefer the former, as it would be more profitable and would avoid conflicts (both military and economic), but they will not be deterred.
At this moment in time, we’re observing a part of that effort. The old structure is being slowly bulldozed and a new structure is underway. It’s very likely that, in order to assure its success, it will be a better one - one which offers its users greater freedom. We can be certain that, like all governmental constructs, it will eventually become corrupted and be just as oppressive as the one it hopes to replace. However, in its early years (and hopefully beyond that) the people of the world will enjoy a period of increased economic freedom.
Some time ago, when I first predicted that China would create such a system, it seemed almost a fairy tale - a highly unlikely development. Yet, China has gotten there even faster than I’d expected. Let’s hope that the day when its benefits trickle down to the street level, worldwide, will also arrive more quickly than I had expected.
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It really says it all that anyone believes that China's financial transfer program may be less onerous than the one run by the West. China is, after all, a dictatorship.
That's not what Shadenfreude is.
Shadenfeude means taking pleasure from someonelse misfortune.
e.g. some asshole cuts you up in traffic and a police car imediately swings out and pulls him over.
OR
An obnoxious co-worker who you recently found out earns more than you do, gets fired for stealing two pencils.
Better yet, some asshole cuts you off in traffic and then hits a police car. Both drivers are killed. Too dark?
That's more pathological sociopath than schadenfreude.
My bad.
Should say how International Jewry is using the remains of the US that they tapped dry to create a similar situation in China for future wealth extractions.
Chai na li da mei king lo sa lo sa mo ni, no kei ring fo xi ti zen. Xi ti zen mei king xi ti ting, sei ling tsu wa lu do, mei king chai na li da mo li chi an do pa wa fu!
Na fam pei hotao !!!
judging by HIS-story standard, the replacement will be far worse...
literally, meet the new bad, same as (er, worse than) the old bad.
Fuckin' Boris springing his shit on me when I've got twelve ounces of tequila and, probabaly, eight times that in beer in me.
Anyone sober enough to translate?
Boris is sober in perpetuity after follow 2-step program, is give you translation:
"Modern China leader is making much money, is not care for proletariat."
I like your thinking, though.
I like the way you think.
"Too dark?"Only if they are both white.
Is that sort of like being over the moon when Iceland jailed 27 bankers and when Llyod Blankfein and Jamie Dimon were diagnosed with cancer? Cool word!
All of this is linear thinking in an increasingly exponential world.
Worthless, in other words — http://www.businessinsider.com/ray-kurzweil-law-of-accelerating-returns-... — as money and banking as we know it, along with its perpetrators, go the way of the dodo:
http://www.cryptonews.biz/how-bitcoin-will-end-the-nation-state-jeffrey-...
Given that Blythe Masters is now part of the Bitcoin world, I would say money and banking as we know it may change over time, and that the more things change.
She's part of the Establishment trying to control what cannot be controlled.
Meanwhile (and somewhat off-topic but based on our last conversation in which you answered me as follows):
Ayn Rand was a corporatist, MIC and oligarch loving Zionist. Her protege Alan Greenspan orchestrated a massive transfer of wealth to the oligarchs, and the best answer I ever get here when I point that out to Rand fans is that he didn't really mean it when he co-wrote with her. But this could not be further from the truth. Her philosophy was one of neo-feudalism, involving a wealthy elite "productive class" who owned the place. You were either in the big club, or a serf. Exactly what we are becoming. I am libertarian in terms of things like gun ownership and freedom of speech, abolishing the war on drugs because who cares if individuals want to take them, and dismantling the police, prison and military industrial complex. I lean socialist on not allowing dynastic wealth because it tends to result in the ills of our current society, and because societies are healthier when there is a vibrant middle class and workers have collective bargaining power, worker friendly trade laws, and reasonable immigration policies that don't allow cheap labor in to take their jerbs. I like public roads and schools and airports, too.
I suggest we work back from that last sentence, as I think, respectfully, that your philosophy falls on its face in the all-too-common notion that "public" is anything is other than socialialism and therefore the inherent tyrannay of the state:
http://www.franz-oppenheimer.de/state1.htm
http://famguardian.org/Publications/OurEnemyTheState/OurEnemyTheState-by...
2/3rds of swiss roads are privately owned.
And I dont have an opinion on Rand, never read her works.
But I do love Milton Friedman but even he wasnt 100% correct.
Finally, Bitcoin Bitchez.
Ayn Rand is the worst writer ever. No imagination. She is a hack enjoyed the world over by mediocre minds.
"2/3rds of swiss roads are privately owned."
I call bullshit on that, care to provide a URL? Perhaps the Kantonalstrassen and Gemeindestrassen don't belong to the federal government, but they do belong to the local government.
I have read Rand.
I admire her works, but she does ignore all but the .001%. All else are the useless eaters. In that Let Them Eat Rand and I are in agreement.
However her thought pattern, is damned near impeccable. She nailed the thoughts of the 99.999%.
What if the 99.999% went Gault?
That's still a Randianism, just refuse to work, report, show up, file or have any interaction with govrernment without forceful resistance?
I got a jury summons today, looking forward to it.
You should live in that "dictatorship" before you condemn it. In America, where the voters supposedly choose their leaders, less than half, often less than 40% are happy with the government. In China, the overwhelming majority of citizens will tell you they are better off now than 10 or 20 years ago. The poor, the middle class, and the rich have all made huge gains. The middle class is growing. In America the middle class is at the same level of income as it was in 1967. Almost all Chinese feel the leaders are making the right decisions for their country.
Before you object to this based on third hand reports by biased writers, you should spend some time in China, not as a tourist in a group, but living, shopping, eating and socializing with the people like I do.
Americans believe that their democracy (whatever that is) is the only system of government that works. Everything is a dictatorship. This is what you would expect from an unintelligent, uneducated person who never travelled and believes only what he is told to believe.
Hey.
I'm a world traveller, I've been to Tiujuana and Toronto.
I'm not as ignerint as most.
But I haven't had the idea that our War Criminal Government 'works' since I woke up in 2008.
Don't cast a too big a castnet, it may take a few of your teeth with it.
It began slowly, then happened all at once.
Get CIPS up and running, dammit!
Lemme know when I go online, and move money from my US bank account to any other bank via CIPS. Or via RIPS (Russia's version).
p.s. Schadenfreude is the joy and gloating you get to experience, in someone finally getting their kermupance. It's healthy, and it's natural.
Schadenfreude You nailed it
Live long and prosper.
I've always used schadenfreude as "laughing at the misfortune of others", you know, laughing at guys getting hit in crotch with baseball, watching homer simpson fall down a cliff, that sort of thing...
No, its watching a braggart being humbled by facts.
I think we have just stumbled on a big part of the reason behind the rushed war on cash in the west. They are not going to let you transfer digits in to CIPS, and they don't want you to have a meaningful amount of paper currency to transfer into it.
PS- and maybe also why FEDGOV is sending destroyer over to start trouble with chicoms.
News, 11/01/2015
Battleship Surprize Attack by China.
Who could have foreseen such an event. It was horrific and unprovoked.
Global War Declared.
Sub Headline
US Debt Declare Invalid.
All US debt owed to warring nations is declared invalid. Britain, Isreal, Saudi Arabia, Japan, and Belgium declare war.
"It’s very likely that, in order to assure its success, it will be a better one - "
How so?
Oh.
You mean like not basing currency upon collateral-free credit?
Hmm.. bad example.
You mean like bailing out favored cronies at the expense of everyone else as much as the current system does?
Hmmm...bad example.
You mean like not succumbing to the temptation of artificially expanding credit and currency, not mirrored in any kind of production, such that it papers over unsustainable enterprizes' losses, and turns them into economic zombies as the current system has done? Or at least at a slower rate, such that it will take more than the 100 years such abuses in the West have needed to bring the economy to its knees?
Bad example, again.
What exactly do you mean?
And by the way...
If the currency system uses real physical collateral for backing, which can be shipped, what do you need a SWIFT, or SWIFT-like system for? SWIFT is a messaging system, used for messaging the transfer of digits, mostly the kind of digits that nations use to back currencies...like government debts. But honestly, if there is physically verifyable collateral without counterparty, and hence no disembodied digits to transfer...why would you even need it?
And if intentions are for such a system to be 'better' EVER then why make 'broken' your starting point?
It's like offering yet another 'Bush' or 'Clinton' for election as 'better' and pretending that no one knows what they'd be getting.
But if you'd accept another Bush or Clinton what motivation would that Bush or Clinton have to be 'better' when all your actions have indicated you are ripe for even more abuse?
Yes, it won't be better. In fact, it will eventually be even MORE controlling, especially if it becomes digital...and the cashless society becomes reality. And I believe that this is very much behind all the financial chaos we are seeing these days...crash the current system, and provide this one in its place - which seems better at first, but in the end, actually is far, far worse...
Is the author proposing that no measures be taken to ensure that wealthy Americans pay their taxes? The FATCA legislation was put in motion by the need to prevent wealthy Americans from evading taxes by hiding income in foreign bank accounts. Admittedly, measures to force foreign banks to comply with US demands for depositor information have been overdone. Surely there are more acceptable ways to accomplish the same result.
John Taylor Gatto said that education today was about controlling how people think. The way you know you have power is that you can make them do and think obviously stupid things.
The way to know you have absolute POWER is knowing that you can make them suffer willfully.
That is the True meaning of Schadenfreude.
The Observers watch the Observees sell themselves.
Information inequity.
Because BECAUSE it's kill the dolla.
It's a nice idea China...just one problem, no one wants to live there under that or th Russian government. They are coming to the west and they bring their money, too.
In order for the USA not to be number one there has to be a war, and not an economic one either.
The top dog only goes down with a knockout and China will not accomplish this without an actual war - Economics are not enough.
We aren't having a world economy run by communists. Period. There will be blood before this is allowed to happen and we have Europe on our side with this.
Frankly I understand the frustration of these other countries but it seems the "what ifs" if it were different are a generation out of living memory, you can make money in China when you've somewhere to send it to or enjoy, but if they run the finial system there won't be anywhere
desperation and disorder,
can you smell it?
AND THAT'S THE PROBLEM!
The world’s most powerful (and most oppressive) political/economic power structure has begun to go under the bulldozer. Its replacement will hopefully be a better one.
[...]
[...]
First of all, China is a permanently feudal society. This is what Confucianism is, feudalism. Confucianism has never lost its grip on China, and likely never will lose its grip on China. Taoism is but a faint echo of a free past before Confucianism arose wiping out all personal freedom in China. Communism is but a newly flavored Confucianist feudalism, peasants and oligarchs, armies and policemen. But mostly bureaucrats. This is why the Chinese oligarchs often flee China.
Has Bill Gates run off to China? Has Carlos Slim run off to China? Did Steve Jobs run off to China, except to purchase slaves? LoL
Second, there is something of a misconception bandied around about war, and world wars in particular, and the political dominance that arises from winning wars, especially from winning a world war. The winners of world wars are saviors.
War is generally not between unrelated nations. War arises because of a cooperative competition between nations. This cooperative competitiion arises because of similarities, not differences. In fact throughout history. the process that creates hybrid populations between races (in the broadest sense) has historically been the source of war. This is Carthage. It is Greece under Philip. It is Rome. It is France after the Sun King when Bonaparte arose. It is Mao's China too.
You see, periodically hybrid populations arise, more intelligent, taller, stronger, more beautiful in every way, and more war capable too. These hybrid populations challenge their forebearers on each side of the genetic spectrum from which they arose.
China is such a mongrel pup. With modernization and more mobilization in China since the long Japanese occupation, the myriad distinct populations of China have mixed and intermingled. They are brilliant. They are storng. They are taller than their forebearers. And they are clearly much more militant.
However, there are other hybrid populations in the world, populations with proven fierceness and military aptitude. The United States is the proven preeminent hybrid nation when it comes to war, hands down.
Now, when we talk about how China is making inroads into the existing financial infrastructure that holds dominion over the world of national economies, a legacy of the west and the U.S. having won WWII, we have to ask, what difference will China's inroads make if China is hobbled and brought to its knees financially and then militarily, again?
For some who are dazzled by the long Chinese history, its seeming great wisdom, and productive capacity, and, are inclined to say (in so many words) that China's feudalism looks pretty appealing, they must measure their charmed lives. One hundred years ago, others made the same mistake about Russian socialism, another feudalist system. These are wanton pipe dreams.
These feudal proprieties are not meritocracies. These are not technocracies. There is no Renaissance going on in the Far East. These are just hybrid feudal systems born of hybrid populations eager to confront the world (and themselves) militarily. And to each is destined their distinct Waterloo and another shackling like Bretton Woods. The Chinese people are begging for liberation, (remember Tiananmen Square?) but they will not find it anywhere in their future. Freedom outside feudalism has literally been bred out of the Chinese people. They are like livestock, just the feudal possession of a state run by corrupt oligarchs.
So few words to define a nation and its future. I am in awe.
https://thinkpatriot.wordpress.com/2015/09/28/important-things-are-not-f...
https://thinkpatriot.wordpress.com/2015/10/02/warning-ideas-are-dangerous/
I feel so amazingly inadequate in the presence of such erudition.
Feudalism involves hereditary rule, which can even exist in
a country that calls itself the “People’s Democratic Republic
of Korea”, but Chinese leaders do not inherit power.
Meritocracy is one of the most enduring features of Confucianism.
For over two thousand years, the Confucian system of examinations
has functioned for most of the time.
The admission policies at Chinese universities are more meritocratic
than those of elite American universities in that they tend to have
a single standard for students without policies to insure diversity
(gender, regional, ethnic, etc...) and they don’t have ‘legacy
admissions’.
This illustrates the great American delusion: that it can control everything, if it just tries hard enough and makes the right decisions. It can't, historical forces are far more powerful. The British could not avoid losing their empire.
The other school suggests that China means to become the most powerful nation in the world - to replace the U.S. In every way as the world's dominant nation.
The morons in this camp obviously have never actually been to China.
Funny how in one breath people say China will rule the world and in the next decry their historic, gigantic credit bubble, atrocious demographics and imminent economic collapse. You can't have it both ways. My guess is that the latter unfolds, which is not to say the US doesn't recede because of the endogenous cluster-fuck generated by Obamarsehole / MIC / neocons.
China has lots of problems just like the US and Europe. So i don't think China will be taking over as some superpower everyone else would have to obey, using sanctions and threats of force to help their favorite oligarchs to build some business empire.
The political and financial problems in the world are shared by everyone in it, and i don't think any country will ever be the master of everyone.
I guess the smart thing to do, would be to repair some of the institutions that could help the world to work together towards common goals, like the UN and IMF for instance.
The idea behind both those institutions is very good, but the influences by special interest groups render this almost useless.
The only smart way forward is large scale cooperation, preferably where everyone is eventually involved, and on terms that are fair and guarantee equal rights for all nations regardless of their size, with no loopholes for the lower types in politics and in the financial world.
In the boom years in Iceland leading up to the crash, there were lots of immigrants that were in Iceland to work and send money to their native countries. Some of those people were extremely happy to see Iceland crash and burn, mostly because they felt that they had been mistreated somehow. Apparently they had not been getting enough benefits and things like that.
This is the only Schadenfreude i saw in the crash, and for some reason, a bunch of those people just happened to be internet trolls who were all over the internet trowing shit at Iceland and Icelanders.
This was very odd and unexpected, but also stupid and pointless and had no impact on anything or any one.
So what's your point dude?
The financial order cannot be changed by inventing another system for cross-border payments, if the currencies used for cross-border payments continue to be the same. CNY will not become an instrument for payments not involving China as long as it pegged to the US$ and capital controls are in place.
However, China is very much on track to dislodge the US$ and change the financial order, but not all by herself. The New Development Bank instituted by the BRICS group will issue a 100% gold backed electronic currency (exchangeable at fixed rate to gold) for setllement between entities in different countries. Only the Central Banks of member countries will hold accounts with the NDB. Any cross-border settlement will be a simple route Sender-Sender's Bank-Sender's Central Bank-NDB-Recipient's Central Bank-Recipient's Bank-Recipient's Account. Since all countries that have electronic banking have unique codes for the banks in the country and each bank has a unique code for each account, a combination of country code (to be assigned by the NDB), bank's national code and the account would specify the sender/recipient, no need for a special system.
Once the system is launched, China will unpeg the Yuan from the US$ and repeg it to the NDB's currency (effectively gold, but only for international payments). Since the members of the NDB will have increasing need for the NDB's currency (to settle payments with other member countries of the NDB) and decreasing need for the US$, they will buy physical gold for their US$ holdings in order to sell it to the NDB and get its currency. This will push up the price of gold in US$ terms and the gold available for pruchase in US$ will be removed from the market and enter the vaults of the NDB.
The official gold holdings at the end of February 2015 (in metric tonnes) are the US - 8,133.5, IMF - 2,814 and Euro area 10,784.1 for a total of 21732 metric tonnes for a total value of US$ 838 billion at US$ 1200 per troy ounce. China alone has over US$ 4 trillion in foreign currency reserves all of which become available to buy gold. Even assuming all the gold available with the US, the IMF and all the Euro area Central Banks is used to satisfy China's demand for gold, gold price will have to go upwards of US$ 5000 per troy ounce and after that they will be left with no gold, a situation not likely to happen. Instead what will likely happen is that the US (and probably the IMF) will be left to defend the US$ against rising price of gold in US$ terms. The US will probably ban gold export to stop the draining of gold from the US. This will lead to a severe devaluation of the US$ against all currencies in order for them to protect their own gold holdings. All countries will stop accepting the US$ as payment for their exports and will use up their US$ holdings to pay for imports from the US. This will cause all US$ held outside the US to return to the US and cause hyperinflation in the currency. US will be forced to use its gold holdings to pay for imports, since it has no foreign currency earnings from its exports (which are paid for in the US$ held outside) and its currency is no longer accepted for external payments. It may even be forced to confiscate privately held gold in order to finance the imports, since the gold with the Federal Reserve (if any is left) won't last long.
It is inevitable.