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"Sic Transit Gloria Pecuni" - LME Considering Ending Sterling, Allowing Renminbi Settlement

Tyler Durden's picture





 

On a long enough timeline, all things come to an end. Even for such venerable venues as the London Metals Exchange, with its 130 year history, and its annual turnover of over $11 trillion in metal contracts, which also makes it the largest market for non-ferrous metals. As the English FT reminisces, "When the LME was established in 1877, Britain was one of the world’s most important manufacturing powerhouses, and the LME’s benchmark contracts for delivery in three months were designed to mirror the length of time needed to reach British ports for shipments of copper from Chile and tin from Malaysia." Furthermore, in the beginning, and all the way through 1993, the flagship copper contract was denominated in sterling, at which point it was switched to the USD following the "Black Wednesday" ERM sterling crisis, courtesy of George Soros who made about $1 billion by shorting the GBP, and formally ended the sterling's role as even an informal backup reserve currency. As of today, insult follows inury, as the LME has formally asked the members of the exchange to drop the sterling contract denomination (in addition to USD, EUR, and JPY contracts) and replace it with the Chinese renminbi. Why this sudden and dramatic, if gradual and tacit, admission that the CNY is the ascendent reserve currency? Because, as the FT reminds us, China has become the market for non-ferrous metals: it is "the dominant force in the market, accounting for more than 40 per cent of global demand for most metals and a rapidly increasing share of trading in LME futures." Add that to yesterday's news of a widening in the CNY band (which incidentally is much ado about nothing, at least for now: at best it will allow China to devalue its currency when and if it so desires much faster than before, much to Geithner's final humiliation), and to the previously reported extensive network of bilateral CNY-based trade agreements already cris-crossing Asia, and one can see why if America is not worried about the reserve status of the dollar, it damn well should be.

From the FT:

The LME is asking its members as part of a survey to help the exchange design its planned new clearing house whether they would like the renminbi to be added to the roster of currencies on offer for settling and clearing, and sterling dropped. The LME plans to maintain its benchmark denominated in US dollars. “We are always looking at new ways to help the market,” the exchange said.

 

The move would be a final blow to sterling’s role in metals trading. The LME’s flagship copper contract was denominated in sterling until 1993, when it switched to dollars in the wake of the Black Wednesday sterling crisis.

 

The use of the UK currency to settle and clear LME contracts has dwindled to negligible levels in recent years, brokers say. “I haven’t traded a contract in sterling for five years,” said the head of one large LME brokerage.

Why China? Because, for better or worse, it has become the marginal buyer.

The use of the renminbi in commodities markets is, on the other hand, slowly increasing as China moves to internationalise its currency. Hong Kong Exchanges & Clearing (HKEx) has announced plans for a range of renminbi-denominated commodity futures, while the Hong Kong Mercantile Exchange (HKMEx) is planning to launch renminbi gold and copper contracts.

 

The Chinese currency would need to become more freely tradable before it could be used for LME trading and settlement. Over the weekend Beijing announced the latest step in the internationalisation of the renminbi, widening its daily trading band.

 

The discussion at the LME reflects the growing involvement of Chinese companies on the exchange. The LME announced this month that Bank of China had applied to become its first Chinese member. It opened an office in Asia in 2010 and members of staff now have business cards printed in both English and Mandarin.

The implications, at least optically, need no further explanation. We would like to conclude with our favorite chart from JPMorgan, which we have dubbed sic transit gloria pecuni.

At this point we are fairly confident which currency is coming next in the new top right space (whether backed by hard assets, and in joint execution  with Russia and/or Germany, or not).

 


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Mon, 04/16/2012 - 20:52 | Link to Comment sampo
sampo's picture

There goes the dollar..

Mon, 04/16/2012 - 20:53 | Link to Comment spiral_eyes
spiral_eyes's picture

These barbarous metalheads and their barbarous metals.

People need to listen to Paul Krugman. The only way to save the dollar is to print trillions and trillions more, and hand them out to all households to end income inequality and raise aggregate demand.

Sorry guys. I'm in a sarcastic mood.

Mon, 04/16/2012 - 21:08 | Link to Comment Pladizow
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Is this a reward for P.A.G.E being disolved?

Mon, 04/16/2012 - 21:32 | Link to Comment AldousHuxley
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FDIC was sued by Judicial Watch twice seeking information regarding the FDIC decision jointly with the Federal Reserve and Treasury Department to “bailout” Citi.

Bair remarked, "We were told by the New York Fed that problems would occur in the global markets if Citi were to fail. We didn't have our own information to verify this statement, so I didn't want to dispute that with them."

 

she played along to get along but no fan of the central bank.

 

Tue, 04/17/2012 - 07:54 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

When you become irrelevant......that's when you know it's time to bow out gracefully.

 

Happy trails amigos.

 

Mon, 04/16/2012 - 21:09 | Link to Comment AldousHuxley
AldousHuxley's picture

Chinese RMB's advantage is that they don't have to convince the world to use their currency because China alone is such a large chunk of the world in terms of population.

 

The question is whether dollar, euro, GBP, will merge into  SDR against RMB or not.

 

value of 1 SDR:

1980:     USD 42%, DEM 19%, FRF 13%, JPY 13%, GBP 13%

2010:     USD 42%, EURO 37%, JPY 9%, GBP 11%

 

You can see Germany and France have stronger currency under Euro than separately before.

 

also note that 2001-2010, USD had share of 44%

Mon, 04/16/2012 - 22:00 | Link to Comment LongBalls
LongBalls's picture

I have been saying for months to my friends and family that the U.S. will merge with Europe and trade as one currency to fight off the East. The weakest EU nations are going to be asked to leave.

Mon, 04/16/2012 - 22:04 | Link to Comment Caviar Emptor
Caviar Emptor's picture

SDR for the ages: USD: 33% CNY: 33% ICBM: 33%.

There. Fixed it. 

Tue, 04/17/2012 - 06:50 | Link to Comment PMakoi
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http://developer.mintchipchallenge.com/

Today's digital economy is changing faster than ever, and currency has to change too. It is, introducing MintChip, from the Royal Canadian Mint - the evolution of currency.

Mon, 04/16/2012 - 21:17 | Link to Comment Dermasolarapate...
Dermasolarapaterraphatrima's picture

I'm waiting for Ben to resurrect the $1000 and $500 bills....what will they look like?

Mon, 04/16/2012 - 21:27 | Link to Comment AldousHuxley
AldousHuxley's picture

they will be in a coin form.

Mon, 04/16/2012 - 22:30 | Link to Comment BooMushroom
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Aren't coins more expensive to produce than paper bills?

Mon, 04/16/2012 - 23:19 | Link to Comment lemonobrien
lemonobrien's picture

sen yen.

Tue, 04/17/2012 - 08:40 | Link to Comment tradewithdave
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Not if you are allowed to confiscate the seignoirage.

http://tradewithdave.com/?p=9935

 

 

Mon, 04/16/2012 - 22:54 | Link to Comment i_fly_me
i_fly_me's picture

By the time they admit they are needed they will need bigger bills than that, a lot bigger.

Tue, 04/17/2012 - 01:33 | Link to Comment RafterManFMJ
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Aight. We know our 'leaders' be they Reptilian Planet X RedShield THEY LIVE aliens or not, really don't want to go wax cars for a living, nor see their kids hunted for sport. So, can they pull this out? Honestly? Issue the New Dollar (IMPROVED, WITH 1/3 THE VALUE!), Issue the Amero, peg the new currency to gold while 'temporarily' devouring all gold held in 'trust' HEEHEE sorry Germany!, and nationalizing all US Gold/Silver mines?

 

Common sense says it's good to be king, and you don't give this up unless you are facing the gallows...so, do you ZH'ers think they can pull this out? And if so, by what mechanism? 

Mon, 04/16/2012 - 20:56 | Link to Comment fonzannoon
fonzannoon's picture

Shiela Bair just said the same thing except she was not being sarcastic

 

Mon, 04/16/2012 - 21:05 | Link to Comment Tyler Durden
Mon, 04/16/2012 - 21:08 | Link to Comment ekm
ekm's picture

I fell for that. When I read it for a 2nd time, I said: Stupid, stupid, stupid, stupid.

Mon, 04/16/2012 - 21:09 | Link to Comment fonzannoon
fonzannoon's picture

She may have been being sarcastic, but....okay fine she was being sarcastic. What is the term for someone who is being sarcastic, yet at the same time is actually predicting a correct outcome?

Mon, 04/16/2012 - 21:16 | Link to Comment LetThemEatRand
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It is ironic that she would sarcastically advocate a ridiculous idea that is actually being implemented by the Bernanke.

Mon, 04/16/2012 - 21:15 | Link to Comment fonzannoon
fonzannoon's picture

Irony...thank you. Thats what I was looking for. 4 beers.....

Tue, 04/17/2012 - 07:54 | Link to Comment Mr. Lucky
Mr. Lucky's picture

I thought sardonic.

Mon, 04/16/2012 - 21:27 | Link to Comment Koffieshop
Koffieshop's picture

Ironical sincerity?
And people should do it more often. Taking the "I'm joking but I'm not" attitude can get opinions on grave matters across to people not looking for a serious discussion.

Mon, 04/16/2012 - 21:44 | Link to Comment palmereldritch
palmereldritch's picture

 sarcaustic

Mon, 04/16/2012 - 21:59 | Link to Comment akak
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Sucktastic

Tue, 04/17/2012 - 00:16 | Link to Comment swmnguy
swmnguy's picture

An old expression for that is, "Kidding on the square."

Tue, 04/17/2012 - 04:12 | Link to Comment StychoKiller
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Gads, I must be getting old!  I actually recognized that phrase.

Tue, 04/17/2012 - 01:37 | Link to Comment RafterManFMJ
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What is the term for someone who is being sarcastic, yet at the same time is actually predicting a correct outcome?

 

The White Man call that 'Demonic.'  And after you hear what she has to say, you normally have to run from an ill-lit collapsing ruin while being pursued by rabid monkeys/flying snakes/angry natives/equity bagholders.  Bonus points if your escape helicopter carries you and your metal away, while dropping 100 dollar bills on your pursuers. 

Tue, 04/17/2012 - 06:25 | Link to Comment francis_sawyer
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Hope & (then) Change

Tue, 04/17/2012 - 07:15 | Link to Comment _underscore
_underscore's picture

She wasn't being sarcastic - sarcastic is overt & relies on a knowing or willing audience; this was more nuanced, subtle. The correct term to use is sarcastic's gentler cousin - disingenuous(ness). That is, one who feigns not to know they are talking as the naif would in that circumstance/context/subject matter area.

Tue, 04/17/2012 - 07:05 | Link to Comment disabledvet
disabledvet's picture

disabledvet

Mon, 04/16/2012 - 21:18 | Link to Comment nmewn
nmewn's picture

"Actually, she was being sarcastic."

Yes she was...and I prefer it without the sarc tag...just like flushing quail ;-)

Tue, 04/17/2012 - 01:03 | Link to Comment jonjon831983
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For ppl not understanding that post.  The term "Modest Proposal" = Extreme suggestion that is meant as a joke.    Look up some centuries old Jon Swift's A Modest Proposal... Basically to solve poverty issues for the poor, he presented a modest proposal to sell their children as food.

 

Doom on you if you took it for realz and sold.

Mon, 04/16/2012 - 21:00 | Link to Comment Mr Lennon Hendrix
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Whatever.  All fiat is worthless.

Mon, 04/16/2012 - 21:20 | Link to Comment ekm
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Very good point. US$ "reserve status" is only backed by US Military, particularly US Navy securing world trade routes. Somebody has to pay for it so the West exchanges real goods and services for electronic dollars (except for in Nov 2011 when Bermanke accepted the Euro-Dollars Swaps). All other world currencies were backed by something real.

I think Tyler is exaggerating the "RMB new world reserve thing", on purpose, for a more colorful writing. Internationalizaton would mean that the world or part of the world exchanges real goods and services for electronic RMB, which I don't see any chance of happening anytime in the next 500 years.

What is really striking to me, is the Barter System the world is evolving into, due to the excessively excessive amount of US$ in the system, that are ending up ...not being exchanged with goods and services, hence parked back to Fed or ECB as "reserves" (that's the key word).

I think the word "reserve" is the most manipulated word in finance. Crude oil is a reserve, gold and silver are reserves, a good crop is a reserve, copper is a reserve, but.....electrons???

Regardless of how much US is need to secure some kind of "world peace" as far as trading is concerned (thx to US Navy), I don't see many resource producers accept excessive electrons in exchange for mostly finite real stuff. That's why the Bilateral Swap Agreements, it's just barter system between China and the other countries.

Mon, 04/16/2012 - 21:29 | Link to Comment LetThemEatRand
LetThemEatRand's picture

"US$ "reserve status" is only backed by US Military"

Hmmm.   I wonder what gigantically overwhelming military forces do when their masters are facing the loss of their ability to conjure money out of thin air to support their mega-yacht-jet-to-Paris-for-lunch lifestyles....?

Mon, 04/16/2012 - 21:42 | Link to Comment ekm
ekm's picture

Good point.

Payment of the overwhelming military has been one of the main reasons for the fall of empires, Rome and Ottoman Empires come to mind.

In Rome actually it came a time when it was the praetorian guard or strong portions of the army that would choose an emperor based on solely on how much the emperor would promise to pay. Constantin the Great was chosen Emperor when he was in England by his own army.

If it ever happens that the US has difficulties paying the military personnel, it's game over.

Mon, 04/16/2012 - 21:46 | Link to Comment Mr Lennon Hendrix
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And I wonder what happens when the US ilitary have trouble conjuring up cheap oil, coniering that oil and the dollar trade inversely.

Mon, 04/16/2012 - 21:54 | Link to Comment ekm
ekm's picture

If by "having trouble" means lose a major war over commodities?  One never knows, but so far it seems not realistic. US Military is too strong and each time somebody (like Iraq) wanted to trade not in dollars and controlled a huge part of oil production, we all know what happened.

All wars are done for natural resources, no exception to this rule.

Mon, 04/16/2012 - 22:07 | Link to Comment Mr Lennon Hendrix
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If you have the machines, but can no longer fund to fuel them, your army runs into problems.  Hitler didn't have any oil so he had to liquify coal to run his tanks, and look where that got him.

Mon, 04/16/2012 - 22:15 | Link to Comment ekm
ekm's picture

IMO there is always a probability of anything, but not real possibility of that happening anytime soon. You never know, though, I'm just being realistic.

Mon, 04/16/2012 - 22:44 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

If the dollar loses significant value, and/or the US MIC can not capture the necessary resources to run its war machines, then the US will be incapacitated.

If the US MIC is incapacitated, then the regime falls.

Mon, 04/16/2012 - 22:50 | Link to Comment ekm
ekm's picture

Nothing to disagree with.

That's why I think interest rates are going up. The more they stay zero the more the world will reject dealing with dollars, hence US may end up lacking not just crude oil, but grains, plastic imports anything US does't make but americans are used to having without worry.

Higher interest rates will make big money investors earn some interest while the money is parked in the US. But higher interest rates would mean less dollars in circulation, not more.

Mon, 04/16/2012 - 22:59 | Link to Comment Bastiat
Bastiat's picture

Higher interest rates will mean a accelaration to the federal deficit spiral.

Mon, 04/16/2012 - 23:15 | Link to Comment ekm
ekm's picture

God, you challenged me. I wanted to go to sleep.

Correct, unless...a diflation shock happens, which I think it is, by design.

Look, Bear Stearns and Lehman destroyed something between 50-100 trillion dollars in derivatives which created a deflation shock, quite low commodity prices hence Fed could do Cocainated Easing.

However, If let's say BAC, C, ML, Jefferies go for elephant shit, about $300 trillion (arbitrary number) in derivatives could just vanish. Commodities' prices would collapse.

Hence, the Treasury could issue bonds and Fed would buy them at Congress' orders (deficit spending) at higher interest but at lower interest payments due to less money around.

Who takes the loss? Thousands of wall street guys unemployed, thousands of hedge funds being long on commodities and China as well as people who invested with those hedge funds all over the world. That's my view. It's just a view, but my money is on it, literally.

Tue, 04/17/2012 - 00:22 | Link to Comment Bolweevil
Bolweevil's picture

ZIRP4EVA
there, fixed it. Not a fan of the ... fixed it thing, but you walked right into that one.

Mon, 04/16/2012 - 22:51 | Link to Comment Prometheus418
Prometheus418's picture

You're assuming that the US will continue to prevent domestic drilling in that case- bad assumption.  Those resevoirs aren't earmarked for you and I to get to work- but if the military needs them, expect to see a whole different tune.

Tue, 04/17/2012 - 06:36 | Link to Comment francis_sawyer
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Yeah ~ everything gets 'nationalized' & you're told it's your patriotic duty to buy war bonds (which become worthless when the war is over)...

Mon, 04/16/2012 - 23:06 | Link to Comment Dr. Engali
Dr. Engali's picture

I think our heavy reliance on technology is going to prove to be another weakness. A well placed EMP attack can do a lot of damage, and we are so reliant an technology that we won't have the overwhelming advantage we are accustomed to.

Mon, 04/16/2012 - 22:07 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Wars are also a gamble. When the outcome seems certain, there have been many notorious tables turned. Vietnam comes to mind as a recent example of "overwhelming odds". Military force provoques reactions

Mon, 04/16/2012 - 22:21 | Link to Comment ekm
ekm's picture

Vietnam war was not a loss by military standard. All goals were achieved at very high levels of life losses, but they were achieved.

Again, in military jargon, Vietnam War was a clear victory. The main goal was not to let USSR take control of the trade routes on South China Sea. Since the Vietnamese population did not join US (like the kurdish population in Iraq for example), they decided to basically destroy Vietnam, leave and let USSR deal with its re-building which became an impossible task for USSR.

However now, US companies have invested a lot in Vietnam. Kind of reparations of war.

Mon, 04/16/2012 - 22:32 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Lol. Like Mussolini was the clear winner in Italy, letting the US do all the heavy post-war lifting. I get it. 

Also humiliation, domestic inflation that busted the US Federal budget and a fully communist nation...those could be interpreted as 'total victory'. 

Even with total air superiority. Even with 500,000 troops. Even with nearly 15 years of invovlement. That's what I call a clear victory. Thanks for setting me straight

Mon, 04/16/2012 - 22:43 | Link to Comment ekm
ekm's picture

It's true. A non-military analysis could conclude that the lagging or hidden costs of that war, (like what you mentioned, federal budget, post-war heavy lifting etc), may have not been worth it at all. You have a srong point, particularly when the life loss is taken into consideration along with health care for the veterans that continues nowadays.

Mon, 04/16/2012 - 22:55 | Link to Comment ekm
ekm's picture

@Lennon @Caviar

Thx for debating. Have a good night.

Mon, 04/16/2012 - 22:45 | Link to Comment Dr. Engali
Dr. Engali's picture

The memory that sticks in my mind from the Vietnam era was the humiliation watching the last of the troops come home. I was pretty young then but I remember it like it was yesterday. What a waste of lives.

Tue, 04/17/2012 - 04:19 | Link to Comment StychoKiller
Tue, 04/17/2012 - 06:40 | Link to Comment francis_sawyer
Tue, 04/17/2012 - 01:07 | Link to Comment jonjon831983
jonjon831983's picture

Or they can try funding start up biofuel companies like algae-based Solazyme...

But looks like they are not cost effective yet.  Just filled a contract for a large batch of naval fuel that was successfully tested.

Mon, 04/16/2012 - 21:45 | Link to Comment azzhatter
azzhatter's picture

I always get the impression that the foreigners increasingly just pay lip service to Geithner to humor him. And the little fucktard elf thinks he's in the game

Tue, 04/17/2012 - 02:08 | Link to Comment akak
akak's picture

Timmah, like his "SouthPark" namesake, is the mentally handicapped dullard who never seems able to realize that they are not laughing with him, they are laughing AT him.

Tue, 04/17/2012 - 02:13 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

duuude.

I'm pretty sure he knows and is paid enough to act how he's told to act.

Tue, 04/17/2012 - 02:11 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

pay them in salt? oh wait you mean THIS time.

Tue, 04/17/2012 - 04:56 | Link to Comment _underscore
_underscore's picture

Only always true if it's paper though (excluding arse-wiping duties..) . Viz - I discovered that my GBP 1 & 2 pence coins (minted before 1992) are made from Alpha bronze, that's 97% copper, 3% tin, and are worth more as scrap metal than nominal coinage value.

The figures are (at april 16th LME scrap metal prices)  ~3.5 pence for a 2 pence coin, and the ~1.75 pence for the 1 pence coin.

Being a bit of a saddo in these matters, I've sorted a big store of change I had & come up with about 3.5Kg of bronze in these coins & separated them from the later post-1992 steel/copper coated coins.

For any Mint or Revenue personnel reading this - I've no intention of defacing (which 'scrapping' is, technically..) these coins - display purposes only!

The fundamental issue though is that even 'low' value coin of copper/tin is now worth more than what it was just ~10 years ago as  basic metal cost of production - and that even excludes the minting/distribution costs. The bowl of bronze coin now sits proudly on my sofa -side table in mute but undeniable testimony to currency debasement.

Mon, 04/16/2012 - 21:03 | Link to Comment sampo
sampo's picture

Change you can believe in!

Mon, 04/16/2012 - 21:04 | Link to Comment alfred b.
alfred b.'s picture

 

    More dollars please...I want to live just like the Jones'

 

 

Mon, 04/16/2012 - 21:06 | Link to Comment cirrus
cirrus's picture

Who wants to store their money in Renminbi? I don't even trust their publically traded companies. It's a country full of bribery, fraud and low margin manufacturing. At least when Japan rose on the economic ladder in the 60's --> 80's they were honorable and produced outstanding products. I'm not saying the USA is a bastion of freedom...but one would think storing your wealth in $'s where at least there's a pretend Constitution is preferable to keeping piles of Renminbi around. China has a loooong way to go to become a true reserve currency.

Mon, 04/16/2012 - 22:06 | Link to Comment seek
seek's picture

Or you can store your wealth in something that is not dependent on any government to retain its value.

That is, not dependent  beyond your ability to hide it from both of the corrupt governments mentioned above.

Tue, 04/17/2012 - 01:03 | Link to Comment toadold
toadold's picture

http://thediplomad.blogspot.com/2012/04/chinas-century-not-if-we-dont-gi...

 

"I love Chinese history; been to China several times; and like and respect the Chinese people--they work hard, they like Americans, and want to study and live in America. I have dealt with China's very slick, tough, and well-trained diplomats. That said, I have found it impressive over the years to see how China has transformed itself from a poor, brutal authoritarian police state into a poor, brutal, authoritarian police state with large foreign currency reserves. Sorry, but shoddily-built skyscrapers, and streets clogged with Fords, BMWs, Lexus, and Buicks, and lined with luxury stores and restaurants cannot hide the hard facts." 

Tue, 04/17/2012 - 02:06 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

China has their own pretend constitution with rights & justice in it.

Tue, 04/17/2012 - 06:27 | Link to Comment fajensen
fajensen's picture

Early Japanese products were absoulutely and universally shitty - but they improved rapidly.  From China, over the internet, one can now buy technologically advanced products, lasers, solar cells, f.ex. that are halfway decent and the Chinese even offer refunds/replacements for defective products. The Chinese are learning, fast too!

They are also learning to not store value in USD, they are buying land, raw materials and businesses.

Mon, 04/16/2012 - 21:06 | Link to Comment Manthong
Manthong's picture

Do they really have a choice?

In the world of fiat, which vehicles represent production, growth and surplus as opposed to consumption, contraction and debt?

Mon, 04/16/2012 - 21:12 | Link to Comment jimmyjames
jimmyjames's picture

As of today, insult follows inury, as the LME has formally asked the members of the exchange to drop the sterling contract denomination (in addition to USD, EUR, and JPY contracts) and replace it with the Chinese renminbi

*********

At his point all they would be doing is basing the CNY settlement on whatever happens to the USD-

They need to de-peg before it means anything-

Hard to say which direction the CNY would go in if they did that?

Mon, 04/16/2012 - 21:15 | Link to Comment AL_SWEARENGEN
AL_SWEARENGEN's picture

Sad to see how far these cocksuckers have distance the true knowledge of money from common people who work hard for what they make.

 

From wiki,, 

"The pound was a unit of account in Anglo-Saxon England, equal to 240 silver pennies and equivalent to onepound weight of silver. It evolved into the modern British currency, the pound sterling." 

Mon, 04/16/2012 - 22:16 | Link to Comment akak
akak's picture

I always laugh at those crazy Brits, who not only were the very last nation on earth to convert to a decimal currency (from their antiquated and medieval farthings/pennies/shillings/florins/crowns/pounds/guineas), but who can't even figure out what to call their unit of currency!

But let me help them: it is the POUND.  "Sterling" has NOTHING to do with it, so unless and until you pasty-faced, boiled beef-and-kidney-pie-eating, wrong-side-of-the-road-driving, Big-Brother-surveillance-loving, dentist-shunning soccer hooligans go back on the silver standard, please stop saying it already!

Tue, 04/17/2012 - 05:19 | Link to Comment _underscore
_underscore's picture

The currency name & denominator isn't that important really. More important are decimal standards (ISO) in scientific/engineering sizing & measurement - which the UK has (in most part) adopted. As far as pound & sterling go - not any confusion really - the sterling part is the currency name & the pound part is the unit, comparable to renminbi & yuan. 'Pound sterling' was used to indicate convertibility to 1 pound weight ( or 454g) of Sterling silver (92.5% silver, by weight), on demand. Note, that indication on British bank notes was dropped some time ago, but was written as:  "I promise to pay the bearer on demand the sum of One Pound".

As far as the other cultural references go Akak, you are of course, entitled to your opinion!

Sat, 06/16/2012 - 04:25 | Link to Comment Setarcos
Setarcos's picture

Rant over?

OK when will Usans adopt the metric system of measurement, stop eating Big Macs and cease swallowing Hollywood and/or Washington whole?

Just sayin' that your rant can SO easily be turned around in EVERY respect.

Personally I think that practically everything is stuffed everywhere, so I'm not taking sides; just sayin' that your rant is absolutely fucking pointless unless, of course, you want to generate conflict.

I expect that you as an "American Exceptionalist" also have rants to make about Moslems and whomever it is in your line of jingoistic fire ... akak gun.  You know, one of those WW2 guns fairly randomly shooting at largely unseen enemies.

 

Mon, 04/16/2012 - 21:41 | Link to Comment bnbdnb
bnbdnb's picture

Isn't this bearish on QE?

Mon, 04/16/2012 - 21:53 | Link to Comment Clowns on Acid
Clowns on Acid's picture

RMB possibly Rouble are looking to go ona gold based standard. Without a gold based standard these economies do not have a chane of being accepted for trade, even between each other.

Of course , with these creditor nations going to a gold based standard....the US and Western Europe are screwed.

Well played Greenspan, Rubin, and Bernanke.

Mon, 04/16/2012 - 22:07 | Link to Comment ekm
ekm's picture

Bilateral agreement or Swaps seem to me as Barter System. They are exchanging real goods with other real goods, but use RMB or Roubles as units of account, for the computers to work. No gold needed in a limited barter system, limited meaning let's say an agreement for 100 billion dollar exchange.

However, if the agreement becomes unlimited, unit of account is needed for math purpose. Hence, gold can be introduced. Strictly theorical, just my opinion.

Mon, 04/16/2012 - 22:33 | Link to Comment Dr. Engali
Dr. Engali's picture

So what happens when people start demanding gold in exchange for their RMB and gold starts leaving the country like it did ours before we closed the gold window in the 70's. Do they slam the gold window too?

Mon, 04/16/2012 - 23:09 | Link to Comment i-dog
i-dog's picture

Gold only "leaves the country" if one falls into a trade deficit (living beyond one's means of support) or a fiscal deficit (purchasing foreign arms or mercenaries in order to wage wars).

Tue, 04/17/2012 - 09:46 | Link to Comment ebworthen
ebworthen's picture

There you go...

World curency based upon trade.

Trade based upon manufacturing base and trade routes.

Trade routes based on the power of the navy of the nation that wants to dominate trade routes.

U.S. Navy Waning.

Chinese Navy Waxing.

Who has more money to spend on ships, subs, missles, armaments, technology, and the Sea of the Future...Space?

CHINA.

Kiss the U.S.A. and Dollar goodbye thanks to the Mammon lusters in Washington and Wall Streeet; the Crony Capitalists and Socialists equivocating and hand-shaking their way to selling out their own for golden toilets and hookers.

There is no gallows high enough nor guillotine blade dull enough for these sophistic yellow-bellied cowards, these traitors - these rapacious psycopathic human leeches - who would sell their Sisters and Mothers as Prostitues and their own Children into slavery!

REVOLT!  REVOLT!  REVOLT!

Mon, 04/16/2012 - 23:47 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

they are "considering" some things;  the LME is "asking" it's members

stay tooned

another epoisode of:  theFungibleFiatFollies?

at one level, the LME (londonBanksters) can design their contracts any way they choose, imo

on another, any farceMajeur would be payable in chinese colored paper coupons(!)?  wtf, BiCheZ!  why not? 

on the third hand: Golden Eye of Hurricane By: Jim Willie CB

Tue, 04/17/2012 - 01:36 | Link to Comment Lost Wages
Lost Wages's picture

Political prisoners in China spend 20 hours a day packing chopsticks in a dark room, then die when some rich guy from another country needs a new spleen plucked from their insides. China has become the model state of our future, so the renminbi must be the monopoly money of the future.

Tue, 04/17/2012 - 07:24 | Link to Comment disabledvet
disabledvet's picture

from Lost Wages to Las Vegas...SEEMLESSLY...
http://www.youtube.com/watch?v=Qm-Hw_nbPx4&feature=player_detailpage

Tue, 04/17/2012 - 06:50 | Link to Comment onebir
onebir's picture

Maybe introducing RMB is also related to Pan-Asia Gold Exchange? (www.pagold.cn)

(I'd have thought they have enough liquidity in the sterling contracts to keep them going though :s)

Tue, 04/17/2012 - 06:52 | Link to Comment PMakoi
PMakoi's picture

Apologize for posting again down at this point, but this is interesting and worth some speculation and your thoughts and comments;

http://developer.mintchipchallenge.com/

Today's digital economy is changing faster than ever, and currency has to change too. It is, introducing MintChip, from the Royal Canadian Mint - the evolution of currency.

 

Tue, 04/17/2012 - 09:51 | Link to Comment ebworthen
ebworthen's picture

Instant perhaps, private and secure - never.

"Digital Security" is unnattainable.

Besides, the goal of things like mint chip is control and oppression, not freedom of choice.

Do NOT follow this link or you will be banned from the site!