China Embraces Gold In Advance Of Post-Dollar Era

Tyler Durden's picture

Submitted by Koos Jansen via AllChinaReview.com,

To challenge the US dollar hegemony and increase its power in the global realm of finance, China has a potent gold strategy. Whilst the State Council is preparing itself for the inevitable decay of the current international monetary system, it has firmly embraced gold in its economy. With a staggering pace the government has developed the Chinese domestic gold market, stimulated private gold accumulation and increased its official gold reserves in order to ensure financial stability and support the internationalisation of the renminbi.

“The outbreak of the crisis and its spillover to the entire world reflect the inherent vulnerabilities and systemic risks in the existing international monetary system…. The desirable goal of reforming the international monetary system, therefore, is to create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run…”

 

Quote from Governor of the PBOC Zhou Xiaochuan 2009.

In the present zeitgeist we find ourselves on the verge of a shift in the global monetary order. The shocks through the financial complex in 2008 that reaffirmed the innate fragility of the US dollar as the world reserve currency have sparked China to become a vocal proponent of de-Americanization, although its end goal is communicated less clearly. Being the second largest economy of the world but relatively in arrears regarding physical gold reserves, China has a strong motive to surreptitiously work on its gold program until completion. For, if it would be candid in its gold ambitions, the price would significantly run higher, potentially disturbing financial markets and narrowing its window of opportunity to prepare for the next phase.

State Council Rapidly Developed Domestic Gold Market And Stimulated Private Hoarding

China has been infatuated with gold for thousands of years. In the mainland, gold mining and use can be traced back to at least 4,000 years ago, and the metal has always represented economic strength and was regarded as the emperors’ symbol of power. Although the Communist Party of China captured the monopoly in gold trade and heavily restricted private gold possession since 1949, in lockstep with the gradual liberalisation and the ascend of the Chinese economy the state started to develop the domestic gold market in the late seventies, which accelerated in 2002.

A new page was turned when the Gold Armed Police started operating in 1979, not coincidentally a few years after the US detached its dollar, the world reserve currency, from gold. This army division was initially assigned to gold mining exploration and has done so quite fruitfully. Since 1979, Chinese domestic mining output has grown 2,137 % from an annual 20 tonnes to an estimated 467 tonnes in 2015. In 1982, the first steps were taken in reviving China’s gold retail channels. For the first time since 1949 people were allowed to buy jewelry and the China Gold Coin Incorporation started issuing Panda coins. The Peoples Bank Of China (PBOC) continued to be the primary gold dealer that fixed the price and controlled all supply flows.

The real reform of the Chinese gold market was implemented on 30 October 2002 by the launch of the Shanghai Gold Exchange, erected to serve the full liberalisation of the domestic gold market. From that date the fixing of the gold price in China was transmitted from the PBOC to the free market. In 2004, the State Council approved gold as an investment for individuals and the PBOC slowly repelled control over supply flows. The Chinese gold market fiercely rose from its ashes. By 2007 the market was functioning as intended when nearly all gold supply and demand was flowing through the SGE system6. A year later, in 2008, the Shanghai Futures Exchange launched a gold futures contract supplementing existing derivatives at the SGE.

The Shanghai Gold Exchange (SGE), which is a subsidiary of the PBOC, is the very core of the Chinese physical gold market. Its infrastructure provides a single liquid exchange overseen by the state, granting all participants a trusty venue that can be efficiently developed and monitored. The mechanics of the Chinese market incentivise nearly all supply and demand to connect within the SGE system. As a consequence, by the amount of gold withdrawn from the vaults of the SGE – data that was published up until December 2015 in the Chinese Market Data Weekly Reports – we could gauge Chinese wholesale gold demand.

After the crisis in 2008, it became apparent in the higher echelons of the Chinese government that the development of the gold market and private accumulation had to accelerate to protect the Chinese economy from looming turmoil. Through state owned banks and media wires the citizenry were stimulated to diversify savings into physical gold. Currently, at Chinese banks, numerous gold saving programs can be entered into, or individuals can open an SGE account and purchase gold directly in the wholesale market.

“Individual investment demand is an important component of China’s gold reserve system, …. Practice shows that gold possession by citizens is an effective supplement to official reserves and is essential for our national financial security.”

 

Quote by the President of the China Gold Association 2012.

When the gold price came down sharply in April 2013, Chinese gold demand literally exploded as in a once in a lifetime event. In between 22 and 26 April, 117 tonnes of physical gold were withdrawn from the vaults of the SGE.

 

gold_graph

 

 

China has been a gigantic gold buyer ever since. Withdrawals from the vaults of the SGE in 2015 accounted for 2,596 tonnes (90 % of global annual mine output), up from a mere 16 tonnes in 2002. SGE withdrawal data correlates with elevated gold import by China.

Whilst clearly enjoying their bargain purchases, China has established a trend of increasingly obfuscating the true size of its gold demand. Not long ago several reports were released in the mainland that disclosed total gold demand to be the equivalent to SGE withdrawals. Since 2012 these reports have been hidden from public eyes and in January 2016 the SGE ceased publishing withdrawal data10. Although annual SGE withdrawals have exceeded 2,100 tonnes since 2013, what is generally publicised as gold demand is roughly half of this, merely the demand at jewelry shops and banks that excludes direct purchases from individual and institutional clients at the SGE. As a result, the global consensus is that Chinese gold demand is approximately 1,000 tonnes a year though in reality it’s twice this volume.

PBOC Accumulating Gold To Support Renminbi Internationalisation

To free itself from US dollar supremacy and force the sequent monetary system, China’s goal is to internationalise the renminbi. For achieving its target, gold is identified as the key. It is the absolute monetary asset to support the renminbi, the dollars’ Achilles heel and a hedge during monetary stress. Next to the swift progression in the Chinese private gold market we can observe the PBOC is covertly buying gold and has launched the Shanghai International Gold Exchange to prepare renminbi internationalisation.

For China the strategic mission of gold lies in the support of renminbi internationalization, and so let China become a world economic power…. Gold is both a very honest asset and forms the very material basis for modern fiat currencies…. Gold is the world’s only monetary asset that has no counter party risk, and is the only cross-nation, cross-language … and cross-culture globally recognized monetary asset.

 

That is why in order for gold to fulfill its destined mission, we must raise our gold holdings a great deal, and do so with a solid plan. Step one should take us to the 4,000 tonnes mark, more than Germany and become number two in the world, next, we should increase step by step towards 8,500 tonnes, more than the US.”

 

Quote by the President of the China Gold Association 2014.

Not surprisingly, China’s strategy is everything but linear. Let us analyse the State Council’s most recent actions with respect to gold and the internationalisation of the renminbi. In addition to gold accumulation, the State Council has aimed to kick start renminbi internationalisation by having it included into the International Monetary Fund’s (IMF) basket of currencies, the Special Drawing Rights (SDR), in 2015. For acceptance, the IMF required openness of China’s international reserves, of which the PBOC hadn’t updated its gold reserves since 2009. Here we found the PBOC stretched between opposing forces; it obviously preferred to hoard gold in concealment not to disturb financial markets, while at the same time it was requested to open its books. In July 2015 the PBOC decided to revise its official gold reserves by 604 tonnes to 1,658 tonnes, which was probably not the whole truth but served both means, as markets barely reacted to the increment – the gold price has not increased since then – and the IMF has granted annexation of the renminbi into the SDR.

How much gold does the PBOC truly hold? Before we make an estimate we must first address the question, how and where does the PBOC buy gold? Some analysts assume the PBOC buys gold in the domestic market at the SGE. According to my research this is not true. My sources in the bullion industry tell me first hand that the PBOC buys gold in the international OTC market using Chinese banks as proxies. And this intelligence fits into the wider analysis, as there are many reasons why the PBOC would not buy gold through the SGE.

A rough estimate suggests the PBOC holds nearly 4,000 tonnes in gold reserves, more than twice the amount they officially disclose. In a quest for any clues we must visit the heart of the gold wholesale market. Data by the London Bullion Market Association points out there have been approximately 1,700 tonnes of monetary gold exported from London between 2011 and 2015. China’s central bank is the foremost suspect for these purchases, given its size and motives, and the tonnage exported from London is consistent with other sources that state the PBOC has bought roughly 500 tonnes a years since 2009. All clues together point to the PBOC holding roughly 4,000 tonnes currently. Although this remains speculation.

More of China’s gold strategy was revealed by the recent launch of the Shanghai International Gold Exchange (SGEI) that offers gold trading in renminbi for clients worldwide, in an attempt by China to strengthen the internationalisation of the renminbi. In itself the SGEI clearly underlines China’s gold ambitions16, but the punch line was added with the launch of the Silk Road Gold Fund in 201517. Led by the SGE(I), the $16 billion fund will boost the gold industry along the Silk Road and in turn “will facilitate gold purchases for the central banks of member states to increase their holdings of the precious metal”, according to the Chinese state press agency Xinhua18. Not only is China trying to persuade all mining and consumption of gold along the Silk Road economic project to be settled through the SGEI in renminbi, additionally the Chinese promote gold as an essential component of central banks’ international reserves going forward.

We must conclude that the State Council views gold as part of the coming international monetary system. Why else does it quickly develop the domestic gold market to be embedded in financial markets, surreptitiously accumulate vast gold reserves and establish a framework to boost gold business on the Eurasian continent around the SGEI? In my view, China contributes significant value to its gold strategy in the shadow of the apparent failure of the current fiat monetary system. And if true, China’s central bank having nearly 4,000 tonnes of gold is well on its way to introduce the next phase.

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38BWD22's picture

 

 

Jim Rickards in his latest two books writes that China is accumulating gold so that when a "reset" comes, they will have about the same amount of gold/GDP as the other major powers (USA, Europe & Russia).  They are (probably) not there yet.  But, once they are, they will then have a lot of influence over the structure of the New World Currency, which Rickards thinks will be the IMF's SDR.  

Gold will be back in the picture according to Rickards.

Escrava Isaura's picture

 

 

China Embraces Gold In Advance Of Post-Dollar Era

Ohh. Yea. Sure.

I have total confidence that, it won’t happen the same way it did in the US in 1970’s.

 

Money Counterfeiter's picture
Money Counterfeiter (not verified) Escrava Isaura Apr 16, 2016 9:05 PM

Chicoms not down with the Zionist NWO?  Lloyd needs to have a talk with them.

Theonewhoknows's picture
Theonewhoknows (not verified) Money Counterfeiter Apr 16, 2016 11:16 PM

In addition to this topic it is interesting to look at China's gold reserves and situation around it http://independenttrader.org/why-china-hides-their-gold-reserves.html

Miles Ahead's picture

as the other major powers (USA, Europe & Russia).  They are (probably) not there yet.

"Europe" doesn't have any Gold.  Some in Europe do, others don't.  And in any case the devil is in the details (on IF we, and/or London, give it back). 

China probably not there yet...  Well, Rickards and we all are guessing.  They keep it top secret.  One thing for sure, they are stacking as priority number one.  We are all in for a nice (for me at least) big surprise.

IMF drawing rights ain't never going to be the World's Currency.  IMF is just about done.  Tell Jim.

Squid-puppets a-go-go's picture

not so sure

china has the gold to upset the imf's cart, i beleive. Maybe they will surprise us and declare 10 000 tonnes, open for independent audit, america show us yer cards.

But how many nations will fall behind china's yuan or the brics gold backed currency? I think we are looking at the evolution of a bipolar global fiat situation here

Bokkenrijder's picture

I don't know if storing gold with the people is such a smart idea in a communist country that does not have the best reputation for human rights.

My guess is that once the shit hits the fan, the people will do the same like they are doing now: leave the country and buy Canadian real estate. The only difference will be that they will be using gold coins instead of fiat dollars.

UselessEater's picture

China upsetting the IMF is questionable.... we are not privy to their plans.

http://www.thenewamerican.com/economy/item/18455-imf-may-move-from-dc-to...

Days after attending shadowy meetings with top globalists and a member of the Chinese Communist Party Central Committee, International Monetary Fund boss Christine Lagarde (shown) shocked the world by saying IMF headquarters could someday move from Washington, D.C., to Beijing. The spectacular statement, which came after her attendance at the infamous Bilderberg summit and the Rothschild-organized “Inclusive Capitalism” conference, came amid an ongoing establishment effort to prepare the world for major economic and political changes in the coming years.

jaxville's picture

  Most people, including those who have gold; will stay where their homes are.  Gold in private hands is in far stronger hands than that which is in government hands.

  I am no fan of the Red Chinese government but what they are doing by encouraging public participation in holding gold will result in widespread national support when it becomes time to roll out the new monetary order.

  Gold is a huge threat to to the credit based currency system and we have seen too many governments in the past mobilize national gold holdings to protect the key credit producing banks.  Will members of the public dump their gold to preserve a corrupt and disfunctional system?

KnuckleDragger-X's picture

China can break the system, but can they replace it? All the super genius's running the shit show now are screwing things up so badly that there won't be a world economy to lead........

BobEore's picture

Contary to the facile observations of "gold analysts" partial to playing up "East vs West," "BRICs vs. PRICS." type memes, the Lloyds and China LLC have been deep in conversation - through both pre & post Mao eras. Just like with Russia, the entire "Chinese Revolutionary" movement was a construction of WallSt/ThreadneedleSt; there have been no changes in ownership since that early phase - just shift in tactics.

The so-called NWO has selected Sinoland as the next repository for their planetary ambitions. Since Deng Xiaoping, the leadership has been given a mandate - not exactly from "Heaven," but most certainly to do "God's Work." And thus, carefully schooled in adopting the most current western financial techniques, in order that they accumulate the necessary heft in the financial arena for this changeover to happen. They have also been intensely schooled in the limits to their autonomy of action - the current downturn in the economy being engineered with precision to demonstrate the perils of too much 'independent deviationism.'

There is a degreee of rebelliousness to all of this - the Xi regime is composed of many layers of wily insiders, including some who are true Sino-nationalists, aware of who's been messing with them for the past century. That's what makes things interesting, watching what goes down in the Middle Kingdom. And totally screws up the "analysis" of faraway western-based writers who script their stories to silly comicbook scenarios like BRICS and "death of the dollar." 

Price suppression in gold and silver has been dictated by the policies of those in control of China's financial fortunes for the past 5 years - in conjunction with their agents of influence in western markets. When they decide its time to change direction, so to will the POS/POG. Until then, beware the revisionist dogma of consensus trance "gold experts" peddling the stories which the puppetmasters use to cover up their schemings.

 

 

Squid-puppets a-go-go's picture

tru dat

even goldbugs can tend to forget, the ultimate aim and utility of gold price supresson is not to suppress it forever, but to build up the money supply pressure to reposition and catapault with gold's rise. Tats the whole point and purpose. 

junction's picture

Gold is independent of economics, a store of value that is useful in case of catastrophe. Such as swarms of major earthquakes striking the planet.  If there is an earthquake in a few days off the Canary Islands, buckle up! 

(CNN) A magnitude-7.8 earthquake occurred Saturday evening on the coast of Ecuador, according to the United States Geological Survey.

The tremor was recorded at a depth of 19.2 kilometers (11.9 miles). There were no immediate reports of damage or injuries in the capital of Quito, located 173 kilometers (108 miles) from the epicenter of the earthquake. A magnitude-6.9 earthquake struck Ecuador in August 2010.

e

38BWD22's picture

 

 

I have read some scary accounts of what could happen if Cumbre Viejo (Canary Islands) has that big landslide into the Atlantic.  Some observers say the tsunami could be 1000' high (!!).  Say adios to the US East Coast of so.

Cumbre Viejo slides into the Atlantic, you have about 6 - 8 hours to catch a flight to semwhere else.....

Winston Churchill's picture

Grand Canary is like a tropical Iceland south of the fault.The entire habitable north end is what will

shear off into the sea at some point..

wanderer9641's picture

Relax - The government will have help assembled within 72 hours.   Just buy a good liferaft.

Ignorance is bliss's picture

In the 70s there wasn't a Dollar alternative available. The world has ensured a 1970s redux won't occur. Today the Euro,the SDR, The Remimbi, and perhaps several regional currencies related to trade blocks could be created. Example A BRICS trade currency. No, I'd say the Dollar is being kicked off the heap. The world will take one look at U.S. Paper Gold or deep storage gold, and tell us to get lost. I'd say life in the U.S. With its current leadership or lack thereof is going to be hard for the next 2-3 decades,

RaceToTheBottom's picture

The US should send them Jon Corzine.  Not that he will be able to steal like he did from US PM holders, but the Chinese will deal with that SOB the way the US does not have the balls to do.

Squid-puppets a-go-go's picture

so china has 4000

and when was the US's 8000 last audited? In the 1960s - years before nixon closed the gold window

Audit plz k thx

TonyRUs's picture

Yeah, considering that the elites consider gold a relic, just a pet rock, i'd be suprised if we have more than China right now. Our lack of gold is probably as much a secret as thier stockpile.

Ignorance is bliss's picture

I don't think there has ever been an independent audit. Just assurances from government officialdom. We know those guys always tell the truth.

Escrava Isaura's picture

 

 

DC,

IMF works for the US. SDR is a backup plan to keep the party going for US elites/corporations once the dollar demand fails outside US. And if you think Americans are screwed now, wait once Wall Mart shelves are half empty, because some foreigners no longer need dollars. Or no longer have surpluses to export.

Quick example: I just purchased raspberries at Costco that were from Mexico. Blueberries from Chile. Tomatoes from Mexico. Chicken from Montreal, Canada.

SDR or not, gold or not. We’re toasted. The elites even more so. Just matter of time.   

 

goldstandard's picture

No wonder all those elite assholes are building their underground bunkers.

38BWD22's picture

 

 

Escravita, you might like Martin Armstrong's economic blog, he has a different take on almost everything: https://www.armstrongeconomics.com/blog/ Most days he puts up a short article or two.  I do not agree with everything he writes, and he is often vague.  But, he has stuff that no one else does.  IDEAS there...
Escrava Isaura's picture

 

 

I used Armstrong in the past, but not anymore. My favorites right now are Richard Werner and Henry Giroux. Last month I spent some time with John Gray. Grays gets human self delusion right, but he gets the post collapse wrong, in my opinion. Grays thinks parts of society will be saved. I don’t see how.

 

Ignorance is bliss's picture

The parts that can leave the U.S. Will be fine

wanderer9641's picture

Parts will be saved - the parts that were so downtrodden that they always had to rely upon their own hard labour to survive as they were too poor to buy anything.  For the rest of us, we will pay the price for being too dependant upon a broken system.

Armed Resistance's picture

Rickards is a dick. Anyone who whores for the CIA can't be trusted. Anyone promoting "special drawing rights" where a few people get to decide who gets the fake currency and what makes them "special" has to be a dick, right?

38BWD22's picture

 

 

Rickards may be a dick, and FOFOA (the gold guy I listen the most to) does not think much of him, but ALL knowledgable people should at least listen.

He apparently DOES have the high-level contacts that he claims.  I have read his last two books.  If you have any comments on his policies, or better solutions, please let us know them.

Counterfiat's picture

How about no globalist SDR. Highlight that Trade barriers have really been banking barriers, now pulled down in favour of banking currency wars. The solution - end the bank union known as central banks, and return money to the people. No personal income tax for which central banking came into existence. Corporations pay their taxes in the countries they earn income, instead of charging 100's of millions for trademark use in Luxemberg/Panama and the like. If we allow corpserations to rule we will have outcomes like we do now.

Kirk2NCC1701's picture

His views etc are found on his blog site.

Armed Resistance's picture

Please see Counterfiat's explaination as my exhibit "fuckin A". Nice work counselor!

Squid-puppets a-go-go's picture

indeed. anyone who wants to criticise jim rickards thesis on the reset, fine , good on you. but debt is suffocating the economy, and what alternative is there to a gold reset to settle debt ? CB's dont hold it for nothing. So what's that something?

Maestro Maestro's picture

FOFOA, just like FOA and A before him, is another trial baloon by the CIA and affiliates to see whether they can fool the people into continuing to use fiat currencies after the international financial system collapses.

 

Essentially, FOFOA says that we should ONLY use fiat as money whilst trying to back his stance with some gold-related credibilty by also saying that we should use gold only as a store of value (or an investment).

 

As you all know, if fiat is money, you can always issue more of it to sell gold futures with and lower the gold price.  So gold is not an issue for the bankers in the fiat world, and a BAD store of value to boot.

BigJim's picture

 Anyone promoting "special drawing rights" where a few people get to decide who gets the fake currency and what makes them "special" has to be a dick, right?

Is he "promoting" that? Or just predicting that's what TPTB will fuck us over with next?

Armed Resistance's picture

I have never heard him denounce them (SDR's) and he speaks about them during every interview. In my book he is indirectly giving credence to the IMF and fiat money in general.

He's clearly a Washington tool with a Hulk Hogan haircut who's very intelligent and well read, but he's an insider through and through. "Thunder lips" Rickards most definately indirectly supports the SDR.

DontWorry's picture

They have a long way to go to dump all their treasuries.  They've done it before only to become net buyers the next year.  If they become sellers it would take about 10 years at the present rate.  And they wont make their holdings worthless if they can avoid it.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014...

Ranger4564's picture

The WORLD is trying to force the US to go Asset Backed. If the US continues to refuse, the World will just have to go with Plan C, to isolate the US. And that is what the World is threatening the US with right now. The US has the option to stop funding the oligarchs / cabal, by establishing an Asset Backed Currency like the rest of the world is doing, or the US can continue to resist, and the World will just continue to move step by step to force the issue. Up to now, the World has been patient, but insistent. Now the World has become impatient, and even more insistent. You can see it in all of the global actions in every area. The World is the one cleaning house, and the point of the DB revelations is to make life for the US banks even harder. Force the hand.

If the US stays firms, and the World decides to isolate the US, expect life in the US to suck. But, expect the trillions of US Treasuries to be meaningless in the big picture. Every nation in the world that owns some treasuries will lose some money, but they for the most part will lose in relation to their national wealth, so the entire thing balances out. And, therein lies I think what is the plan of the US. To have the World write off the Treasuries, and dedollarize, at which point, the US owes no one anything, and comes out with an Asset Backed Currency, to reengage with the world. However, I think the World will prevent the US reentry. So it's a shitty game, and it's one I'm sure the World is aware the US is playing.

Escrava Isaura's picture

 

 

Your post has merits. Anyway,

If Asset Backed Currency becomes the rule, prepare for civil war in the US.

If the world dedollarize, prepare for WW-3.

Wonder why? Most jobs, and their material world in the US will be gone.  

 

Charming Anarchist's picture

I reckoned that Assed Backwards Currency was always the rule. 

Darth Rayne's picture

Excellent analysis, your critical thinking skills are superb.

I am not convinced the world is attempting to do anything except ride the fiat train over the cliff.

The euro was introduced to allow the dollar to die without derailing the fiat train.

The Jim Rickards IMF SDR is another path that allows the dollar to die, or even the euro, without derailing the fiat train.

Huge government, huge banks, only exist due to the fiat train. Huge corporations only exist because the fiat train exists.

Increasing centralised power only increases because of the fiat train.

This fiat train does not do the average Joe any favours. The average Joe is neither schooled, trained, educated or encouraged to critically think. That must change before anything else changes in a meaningful way.

https://davidwatkinson.blogspot.co.uk

Ranger4564's picture

Whether the world is or is not doing something will become evident shortly. I can't prove it, but there are signs everywhere in my opinion.

The Euro was not introduced to destroy the dollar, on the contrary, the Euro was introduced to destabilize and rob from Europe, to fund the dollar. The cabal intended to destroy Europe, same as they have been Japan, South America, Asia, Africa, etc... you get the picture? The Euro was designed to be a single currency that could cripple many nations, subjugating them to the NWO, and making them easy vassals to conrol. That was until the European nations saw what was happening and decided to work with China and Russia and Brazil and India... Asia, Europe, Africa, and South and Central America... Don't include Rome, London, Israel, or other such locations.  BRICS is really, the largest most populous and most powerful nations on each of the continents, being the face, the body includes the rest of the nations on each of those continents. Euro sabotage was equivalent to encircling China / Russia, so the Chinese / Russians / Germans decided it was time to act. Except most of Europe is occupied and obligated to NATO, so the other countries acted first.

IMF SDR is not equivalent to the dollar. The dollar was a national currency forced onto the entire world. The SDR is a non-sovereign currency (IMF is not a nation), global by design and origin, to be the NWO currency. It's not just that it will replace the dollar, it will replace the nation state. It is the culminnation of the corporate / capitalist coup against sovereignty. It is a global Republic (powerful dictate to the masses), and will bring in global Feudalism. The Chinese, if they decide to honor the SDR without displacing it with the national sovereign currencies of every country as I am anticipating of the global currency reset, will then show themselves to be nothing more than the new face of the NWO facilitators.

Huge government / military / corporations / banks... Ultimately, this comes down to Oppressive individuals with no morals, threatening to exterminate anyone who stands in their way, and as people cower, the oppressors become more powerful. By using the mecchanics of capitalism / nationalism, they silenced the opposition as they rose to control everything. In communist countries, they just controlled everything. In either case, they pillaged and looted, tormenting individual nation states as others watched, which led to greater and greater control for the oppressors. At some point, you either stand up against such tyranny, or you succumb to slavery. That is what the BRICS recognized. And some decided to take a stand, leading to everyone taking a stand. The only problem is, the cabal was allowed to exist for so long, it's a way of life for most of human civilization, and they have infitrated every aspect of every component of human civilization, so rooting out the evil is not a one time event, it is a long term re-education strategy... it's just that the crimes need to be stopped asap.

Various economic and political systems exist that allow increase in power, and it has nothing to do with FIAT, it has to do with violence. Everything is ultimately FIAT, even metals or algorithms.

The last part about society needing to begin thinking, that applies to everyone, including everyone. Here, there, everywhere. Everyone has to begin to free themselves of the intellectual straight jackets, to allow humanitarianism and prosperity to flourish. We do not live on a scarcity planet. We live with a scarcity mindset and scarcity or imagination. 

 

Darth Rayne's picture

Hi Ranger, your critical thinking skills are superb. 

You haven't just provided me with food for thought, you have provided mankind with a banquet.

Thank you.

Maestro Maestro's picture

I believe this guy is another one of those elite freegolders.

 

When they first appeared on the scene, they were singing the praises of the euro as the anti dollar.  Now that the euro has been exposed as the fraud it was, you're lauding the SDR as the new-and-improved fiat champion?

 

You are evil.

Maestro Maestro's picture

You are lying.

 

The world is not interested in an asset-backed currency nor interested in forcing it on the Americans.

 

The world is only interested in becoming America.