That would likely happen only if India allows funds to be used for developing Chinese-owned deepwater drilling rigs in disputed areas of the South China Sea.
BRICS Development Bank
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amoy
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China shall not get preoccupied with that BRICS Development Bank either.
The grouping BRICS is multilaterally impotent by now, sheerly a talking forum with members not in the league at all. The priority shall be given to striking one-to-one bilateral deals in which China can have the leverage to the largest extent.
China, Brazil agree currency swap deal -- Shanghai Daily | 上海日报 -- English Window to China New
arya
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The mooted BRICS bank of emerging powers is intended to complement, rather than compete with Western-dominated institutions on the world stage, the Indian Finance Minister said on Monday.
Finance Minister P. Chidambaram also said India supports Japan's nomination of a senior finance ministry official for the top job at the Asian Development Bank (ADB), as Tokyo looks to keep hold of a role it has held for almost 50 years.
The BRICS bank is seen as a way of challenging the rules set by existing institutions like the World Bank, countering Europe's economic crisis and addressing the $4.5 trillion in infrastructure spending the BRICS are estimated to need over the next five years.
"The BRICS bank will not be a competitor for the World Bank or the ADB. It will complement the World Bank or the ADB," Chidambaram told a news conference in Tokyo during a two-day visit to Japan.
"Why do we need the bank? Because, the funds that are now available through the existing multilateral institutions are insufficient. The World Bank, the ADB, provide funds but (they are) insufficient," he said.
"These countries have large savings... So we want to mobilise our savings as well as take capital to other member countries in order that we can lend more," Chidambaram said, referring to Brazil, China, India, Russia and South Africa.
"There are governance problems... reforms of the IMF and the World Bank have been considerably delayed because of governance issues," he said, adding plans to boost capital in these institutions have yet to be realised.
The comments came after leaders from the BRICS group of emerging powers held talks last week in the South African port city of Durban to finalise the plan.
The top jobs for the World Bank and the International Monetary Fund have been historically occupied by Americans and Europeans, respectively.
Similarly, every ADB president has been Japanese since its founding in 1966.
However emerging nations have become increasingly vocal critics over US and European control of such institutions even as their own economic power and global influence soars.
But Chidambaram said India has already expressed its support to Japanese candidate Takehiko Nakao to head the Manila-based ADB with its chief Haruhiko Kuroda having stepped down to take over as head of the Bank of Japan.
"Mr Nakao met me earlier today and thanked me" for the support, he said.
Calling for more Japanese investment in India, he said: "We are governed by the rule of law. We are a democracy. We have free press...We have a system of law and courts. Any dispute will be resolved through legal suit...that is what makes India not only an attractive destination but a safe destination."
During his visit in Japan aimed at boosting economic ties, Chidambaram will meet Japanese Prime Minister Shinzo Abe and Finance Minister Taro Aso as well as Bank of Japan governor Kuroda, he said in a press note.
Japan last week pledged 220 billion yen ($2.3 billion) for infrastructure projects in the huge country.
The yen-denominated loan package covers four projects, including a freight railway project connecting New Delhi and Mumbai, and a subway construction project in southern India.
Separately, Japan also pledged to provide India with fresh loans of 71 billion yen for the construction of an underground railway in Mumbai.
Finance Minister P. Chidambaram also said India supports Japan's nomination of a senior finance ministry official for the top job at the Asian Development Bank (ADB), as Tokyo looks to keep hold of a role it has held for almost 50 years.
The BRICS bank is seen as a way of challenging the rules set by existing institutions like the World Bank, countering Europe's economic crisis and addressing the $4.5 trillion in infrastructure spending the BRICS are estimated to need over the next five years.
"The BRICS bank will not be a competitor for the World Bank or the ADB. It will complement the World Bank or the ADB," Chidambaram told a news conference in Tokyo during a two-day visit to Japan.
"Why do we need the bank? Because, the funds that are now available through the existing multilateral institutions are insufficient. The World Bank, the ADB, provide funds but (they are) insufficient," he said.
"These countries have large savings... So we want to mobilise our savings as well as take capital to other member countries in order that we can lend more," Chidambaram said, referring to Brazil, China, India, Russia and South Africa.
"There are governance problems... reforms of the IMF and the World Bank have been considerably delayed because of governance issues," he said, adding plans to boost capital in these institutions have yet to be realised.
The comments came after leaders from the BRICS group of emerging powers held talks last week in the South African port city of Durban to finalise the plan.
The top jobs for the World Bank and the International Monetary Fund have been historically occupied by Americans and Europeans, respectively.
Similarly, every ADB president has been Japanese since its founding in 1966.
However emerging nations have become increasingly vocal critics over US and European control of such institutions even as their own economic power and global influence soars.
But Chidambaram said India has already expressed its support to Japanese candidate Takehiko Nakao to head the Manila-based ADB with its chief Haruhiko Kuroda having stepped down to take over as head of the Bank of Japan.
"Mr Nakao met me earlier today and thanked me" for the support, he said.
Calling for more Japanese investment in India, he said: "We are governed by the rule of law. We are a democracy. We have free press...We have a system of law and courts. Any dispute will be resolved through legal suit...that is what makes India not only an attractive destination but a safe destination."
During his visit in Japan aimed at boosting economic ties, Chidambaram will meet Japanese Prime Minister Shinzo Abe and Finance Minister Taro Aso as well as Bank of Japan governor Kuroda, he said in a press note.
Japan last week pledged 220 billion yen ($2.3 billion) for infrastructure projects in the huge country.
The yen-denominated loan package covers four projects, including a freight railway project connecting New Delhi and Mumbai, and a subway construction project in southern India.
Separately, Japan also pledged to provide India with fresh loans of 71 billion yen for the construction of an underground railway in Mumbai.
amoy
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BRICS countries to set up their own IMF | Russia Beyond The Headlines)
The BRICS countries (Brazil, Russia, India, China and South Africa) have made significant progress in setting up structures that would serve as an alternative to the International Monetary Fund and the World Bank, which are dominated by the U.S. and the EU. A currency reserve pool, as a replacement for the IMF, and a BRICS development bank, as a replacement for the World Bank, will begin operating as soon as in 2015, Russian Ambassador at Large Vadim Lukov has said.
Brazil has already drafted a charter for the BRICS Development Bank, while Russia is drawing up intergovernmental agreements on setting the bank up, he added.
In addition, the BRICS countries have already agreed on the amount of authorized capital for the new institutions: $100 billion each. "Talks are under way on the distribution of the initial capital of $50 billion between the partners and on the location for the headquarters of the bank. Each of the BRICS countries has expressed a considerable interest in having the headquarters on its territory," Lukov said.
It is expected that contributions to the currency reserve pool will be as follows: China, $41 billion; Brazil, India, and Russia, $18 billion each; and South Africa, $5 billion. The amount of the contributions reflects the size of the countries' economies.
Russia to launch domestic alternative to Visa and Mastercard
By way of comparison, the IMF reserves, which are set by the Special Drawing Rights (SDR), currently stand at 238.4 billion euros, or $369.52 billion dollars. In terms of amounts, the BRICS currency reserve pool is, of course, inferior to the IMF. However, $100 billion should be quite sufficient for five countries, whereas the IMF comprises 188 countries - which may require financial assistance at any time.
BRICS Development Bank
The BRICS countries are setting up a Development Bank as an alternative to the World Bank in order to grant loans for projects that are beneficial not for the U.S. or the EU, but for developing countries.
The purpose of the bank is to primarily finance external rather than internal projects. The founding countries believe that they are quite capable of developing their own projects themselves. For instance, Russia has a National Wealth Fund for this purpose.
"Loans from the Development Bank will be aimed not so much at the BRICS countries as for investment in infrastructure projects in other countries, say, in Africa," says Ilya Prilepsky, a member of the Economic Expert Group. "For example, it would be in BRICS' interest to give a loan to an African country for a hydropower development program, where BRICS countries could supply their equipment or act as the main contractor."
If the loan is provided by the IMF, the equipment will be supplied by western countries that control its operations.
Asian markets offer a way out for Russia
The creation of the BRICS Development Bank has a political significance too, since it allows its member states to promote their interests abroad. "It is a political move that can highlight the strengthening positions of countries whose opinion is frequently ignored by their developed American and European colleagues. The stronger this union and its positions on the world arena are, the easier it will be for its members to protect their own interests," points out Natalya Samoilova, head of research at the investment company Golden Hills-Kapital AM.
Having said that, the creation of alternative associations by no means indicates that the BRICS countries will necessarily quit the World Bank or the IMF, at least not initially, says Ilya Prilepsky.
Currency reserve pool
In addition, the BRICS currency reserve pool is a form of insurance, a cushion of sorts, in the event a BRICS country faces financial problems or a budget deficit. In Soviet times it would have been called "a mutual benefit society", says Nikita Kulikov, deputy director of the consulting company HEADS. Some countries in the pool will act as a safety net for the other countries in the pool.
The need for such protection has become evident this year, when developing countries' currencies, including the Russian ruble, have been falling.
The currency reserve pool will assist a member country with resolving problems with its balance of payments by making up a shortfall in foreign currency. Assistance can be given when there is a sharp devaluation of the national currency or massive capital flight due to a softer monetary policy by the U.S. Federal Reserve System, or when there are internal problems, or a crisis, in the banking system. If banks have borrowed a lot of foreign currency cash and are unable to repay the debt, then the currency reserve pool will be able to honor those external obligations.
This structure should become a worthy alternative to the IMF, which has traditionally provided support to economies that find themselves in a budgetary emergency.
"A large part of the fund goes toward saving the euro and the national currencies of developed countries. Given that governance of the IMF is in the hands of western powers, there is little hope for assistance from the IMF in case of an emergency. That is why the currency reserve pool would come in very handy," says ambassador Lukov.
Who will become the Russian S&P?
The currency reserve pool will also help the BRICS countries to gradually establish cooperation without the use of the dollar, points out Natalya Samoilova. This, however, will take time. For the time being, it has been decided to replenish the authorized capital of the Development Bank and the Currency Reserve Pool with U.S. dollars. Thus the U.S. currency system is getting an additional boost. However, it cannot be ruled out that very soon (given the threat of U.S. and EU economic sanctions against Russia) the dollar may be replaced by the ruble and other national currencies of the BRICS countries.
http://en.itar-tass.com/economy/727212
The BRICS countries (Brazil, Russia, India, China and South Africa) have made significant progress in setting up structures that would serve as an alternative to the International Monetary Fund and the World Bank, which are dominated by the U.S. and the EU. A currency reserve pool, as a replacement for the IMF, and a BRICS development bank, as a replacement for the World Bank, will begin operating as soon as in 2015, Russian Ambassador at Large Vadim Lukov has said.
Brazil has already drafted a charter for the BRICS Development Bank, while Russia is drawing up intergovernmental agreements on setting the bank up, he added.
In addition, the BRICS countries have already agreed on the amount of authorized capital for the new institutions: $100 billion each. "Talks are under way on the distribution of the initial capital of $50 billion between the partners and on the location for the headquarters of the bank. Each of the BRICS countries has expressed a considerable interest in having the headquarters on its territory," Lukov said.
It is expected that contributions to the currency reserve pool will be as follows: China, $41 billion; Brazil, India, and Russia, $18 billion each; and South Africa, $5 billion. The amount of the contributions reflects the size of the countries' economies.
Russia to launch domestic alternative to Visa and Mastercard
By way of comparison, the IMF reserves, which are set by the Special Drawing Rights (SDR), currently stand at 238.4 billion euros, or $369.52 billion dollars. In terms of amounts, the BRICS currency reserve pool is, of course, inferior to the IMF. However, $100 billion should be quite sufficient for five countries, whereas the IMF comprises 188 countries - which may require financial assistance at any time.
BRICS Development Bank
The BRICS countries are setting up a Development Bank as an alternative to the World Bank in order to grant loans for projects that are beneficial not for the U.S. or the EU, but for developing countries.
The purpose of the bank is to primarily finance external rather than internal projects. The founding countries believe that they are quite capable of developing their own projects themselves. For instance, Russia has a National Wealth Fund for this purpose.
"Loans from the Development Bank will be aimed not so much at the BRICS countries as for investment in infrastructure projects in other countries, say, in Africa," says Ilya Prilepsky, a member of the Economic Expert Group. "For example, it would be in BRICS' interest to give a loan to an African country for a hydropower development program, where BRICS countries could supply their equipment or act as the main contractor."
If the loan is provided by the IMF, the equipment will be supplied by western countries that control its operations.
Asian markets offer a way out for Russia
The creation of the BRICS Development Bank has a political significance too, since it allows its member states to promote their interests abroad. "It is a political move that can highlight the strengthening positions of countries whose opinion is frequently ignored by their developed American and European colleagues. The stronger this union and its positions on the world arena are, the easier it will be for its members to protect their own interests," points out Natalya Samoilova, head of research at the investment company Golden Hills-Kapital AM.
Having said that, the creation of alternative associations by no means indicates that the BRICS countries will necessarily quit the World Bank or the IMF, at least not initially, says Ilya Prilepsky.
Currency reserve pool
In addition, the BRICS currency reserve pool is a form of insurance, a cushion of sorts, in the event a BRICS country faces financial problems or a budget deficit. In Soviet times it would have been called "a mutual benefit society", says Nikita Kulikov, deputy director of the consulting company HEADS. Some countries in the pool will act as a safety net for the other countries in the pool.
The need for such protection has become evident this year, when developing countries' currencies, including the Russian ruble, have been falling.
The currency reserve pool will assist a member country with resolving problems with its balance of payments by making up a shortfall in foreign currency. Assistance can be given when there is a sharp devaluation of the national currency or massive capital flight due to a softer monetary policy by the U.S. Federal Reserve System, or when there are internal problems, or a crisis, in the banking system. If banks have borrowed a lot of foreign currency cash and are unable to repay the debt, then the currency reserve pool will be able to honor those external obligations.
This structure should become a worthy alternative to the IMF, which has traditionally provided support to economies that find themselves in a budgetary emergency.
"A large part of the fund goes toward saving the euro and the national currencies of developed countries. Given that governance of the IMF is in the hands of western powers, there is little hope for assistance from the IMF in case of an emergency. That is why the currency reserve pool would come in very handy," says ambassador Lukov.
Who will become the Russian S&P?
The currency reserve pool will also help the BRICS countries to gradually establish cooperation without the use of the dollar, points out Natalya Samoilova. This, however, will take time. For the time being, it has been decided to replenish the authorized capital of the Development Bank and the Currency Reserve Pool with U.S. dollars. Thus the U.S. currency system is getting an additional boost. However, it cannot be ruled out that very soon (given the threat of U.S. and EU economic sanctions against Russia) the dollar may be replaced by the ruble and other national currencies of the BRICS countries.
http://en.itar-tass.com/economy/727212
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LETHALFORCE
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If this gains acceptance it could reshape world Trade and economies in many nations.
thethinker
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"Representing a fifth of the world economy, the BRICS states pose a challenge to the US-dominated world. Submarket growth in Russia and the West could also change more rapidly, shifting the whole world system Eastwards. Is this the start of a new era? Former Foreign Secretary of India Kanwal Sibal is on Sophie&Co today. "
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amoy
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Brics to Launch Contingency Fund in July - WSJ.com
BRASILIA--Brazil, Russia, India, China and South Africa are set to launch a contingency fund during a July summit in Brazil, Brazilian Finance Minister Guido Mantega said Tuesday.
The $100 billion fund is meant to be a buffer for the group of emerging economies known as the Brics countries.
BRASILIA--Brazil, Russia, India, China and South Africa are set to launch a contingency fund during a July summit in Brazil, Brazilian Finance Minister Guido Mantega said Tuesday.
The $100 billion fund is meant to be a buffer for the group of emerging economies known as the Brics countries.
pmaitra
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THE NEW EXCHANGE RATE SYSTEM
Excerpts, but please do read the entire article. It is very enlightening.
Excerpts, but please do read the entire article. It is very enlightening.
Read in full: The New Exchange Rate System | philosophyofmetrics
pmaitra
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@Cadian, @IBSA, let us get more Russian and Brazilian views on this.
I wish we had at least one member from RSA.
@Razor, @happy, @Sakal Gharelu Ustad, @VIP, @The Messiah, @Twinblade, et al., please critique the post above.
I wish we had at least one member from RSA.
@Razor, @happy, @Sakal Gharelu Ustad, @VIP, @The Messiah, @Twinblade, et al., please critique the post above.
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Twinblade
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As long as US holds more than 15% votes in the IMF, they will never allow SDRs to be used as a supra currency. The flight of fantasy can be shot down, right here. The rest of the article is fairly accurate. Any move to any form of supra currency will involve countries world over, especially BRICS nations, dumping trillions of dollars in the market (not instantaneously but over a reasonably long term) leading in a devaluation of value of dollar over time. The US federal bank prints dollars and sells bonds, but with a higher availability of dollars, their efforts would be in vain. The use of Dollar as a world reserve currency benefited the United states a lot, but the abandoning of dollar will hurt them equally.
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happy
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@pmaitra posted about the new exchange rate system. As a continuation to that article or rather a preclude to it please see the below and you will get ample reasons why the new exchange rate may be a reality soon.
*************************************
SDR’s and the New Bretton Woods – Part One | philosophyofmetrics
"The legislative process is underway right now. We want the reforms to be adopted expeditiously. It's really the U.S. Treasury, Jack Lew and his team that's taking the lead on getting these measures through the U.S. Congress that are required to implement the 2010 reforms."
"Just to remind you what those are, the 2010 reforms do a couple things. One, they bring four dynamic emerging market countries into the top 10 shareholder ranks or what we call quota ranks of the institution. China, Brazil, Russia, India. It also doubles our permanent capital, the quota. And it also creates a fully elected Executive Board."
– William Murray, I.M.F. Deputy Spokesman, Jan 9, 2014.
"The IMF is explicit in its antidemocratic leanings, what it calls "political considerations". The SDR blueprint calls for the appointment of "an advisory board of eminent experts" to provide direction on the amount of money printing in the new SDR system. Perhaps these "eminent experts" would be selected from among the same economists and central bankers who led the international monetary system to the brink of destruction in 2008."
– James Rickards, Currency Wars, Penguin Group, 2011
_______________________________________________________________________________
G. Edward Griffin's mind altering "The Creature from Jekyll Island" introduced many of us to the somewhat hidden history of the U.S. Federal Reserve. It told of how the Federal Reserve Act was passed in Congress during the Christmas break in the year 1913. It was insidious. And it changed the course of human history, as it planted the seed of what would slowly grow to become the world's reserve currency.
Though the U.S. dollar didn't become the official reserve currency until the Bretton Woods Agreement of 1944, it is commonly accepted that the dollar had already usurped the British pound of this title well before it was officially acknowledged. As I believe the U.S. dollar has now already been usurped by another. We'll get back to that in a while.
There was another event which took place in the year 1913 which has been little understood or known at all in the western world today. After the collapse of the Manchu Dynasty in 1911, the remaining Government of the Chinese Republic issued bonds to foreign investors for the purpose of raising capital to rebuild the country. These bonds were titled the 1913 Chinese Government 5% Reorganization Gold Loan. Emphasis on the word gold for later reference.
These bonds were pegged to the price of gold as a hedge against future inflation and were denominated in four currencies. The underwriting banks for the bonds reflect the four currencies which the bonds were interchangeable with at the time, which are now known as HSBC, Deutsche Bank, the Bank of Tokyo-Mitsubishi UFJ, and Caylon – Credit Agricole Corporate and Investment Bank.
Keep in mind that these bonds were issued in the same context as the U.S. Treasury Bonds which the world's central banks have been gobbling up since 1944. These bonds had a yield. These bonds have never fully been acknowledged by the Chinese government. As a part of the deal with the British government for the return of Hong Kong, the People's Republic of China did honor 10% of the outstanding bonds at about 62% of the face value. And what I can say at this time is that there is in fact a deal in the works for a final payout on the remaining bonds. We'll get back to that in a while.
In 1944, as a part of the Bretton Woods system, the International Monetary Fund and the World Bank were created. These were western dominated institutions whose sole purpose was organizing foreign markets for the acceptance of U.S. dollars. We will leave the full explanation of these institutions and their role in structuring our current debt based system for another essay series, but for our purposes here, it's important to understand that they propagated the exporting of dollar inflation to what we now call the "emerging markets", or the BRICS countries.
Since the initial printing of the Federal Reserve Note (U.S. dollar) in 1913, the "dollar" has lost 95% of its value. We see this devaluation of the dollar as inflation, or the increase of costs for items we buy. This devaluation of the dollar has had a few milestones. One is after the Bretton Woods Agreement when the dollar became the primary reserve currency of the world. The second came when President Richard Nixon uncoupled the dollar from its peg with gold. This was in 1971. A third milestone can be argued to be in 1973, when the so called "petrodollar" was created with agreements between the U.S. and Saudi Arabia, and later all the OPEC countries. This "petrodollar" scheme ensured that all oil trades were completed internationally in U.S. dollars. This was a slight-of-hand from the Bretton Woods arrangement to the "petrodollar" arrangement.
A fourth milestone was obviously the onset of Quantitative Easing after the financial crisis of 2008. The chart below clearly shows how with each milestone the amount of debt (money printing) by the U.S. Treasury and Federal Reserve tag team has been multiplied dramatically leading to inflation. This is shown by an increase in the red line, which represents CPI – Consumer Price Index, the amount you pay for stuff.
The only end to this pattern is an end to the dollar as the world's primary reserve currency. Just like the British pound before it. In the chart below you'll notice the same gradual downward pattern as the U.S. dollar.
The central banks of the world were buying up U.S. treasuries before the British even accepted that there was a problem with the pound. The same is happening today with the dollar. In fact, most of the world outside the United States has already accepted the demise of the dollar as fact. But the idea is unfathomable to the average American.
The International Monetary Fund issues a currency called SDR – Special Drawing Rights. The SDR's are valued on a basket of currencies. In essence, it's a true to life multiply reserve currency system. It has been slowly built up since the early 1970's, at the same time the U.S. dollar started its serious devaluation. Could the plan have been in place since 1971 to end the dollar system through hyperinflation before implementing the SDR as a true world currency? Perhaps.
On January 9, 2014, I.M.F. Deputy Spokesman William Murray was giving a press briefing. With zero coverage of this briefing in the western media, it's important to relay what happened when the questioned was asked about the implementation of the 2010 Code of Reforms, or Governance Reforms. Mr. Murray answered by stating:
"The legislative process is underway right now. We want the reforms to be adopted expeditiously. It's really the U.S. Treasury, Jack Lew and his team that's taking the lead on getting these measures through the U.S. Congress that are required to implement the 2010 reforms."
It seems both the U.S. Treasury and the I.M.F. are very anxious about these reforms. So what are they?
"Just to remind you what those are, the 2010 reforms do a couple things. One, they bring four dynamic emerging market countries into the top 10 shareholder ranks or what we call quota ranks of the institution. China, Brazil, Russia, India. It also doubles our permanent capital, the quota. And it also creates a fully elected Executive Board."
This tells us a few important things. One, the influence of the BRICS countries within the structure of the I.M.F. is going to be greatly expanded. As stated, they will be in the top 10 shareholder ranks. These are positions previously dominated by western financial and U.S. dollar interests. The gravity of this statement cannot be understated.
Second, it's telling us that the BRICS countries are bringing capital with them. Enough capital in fact, to double what the I.M.F. presently holds on reserve. The BRICS countries will be injecting a huge amount of capital into the SDR system. One only has to research the amount of gold being exported to the BRICS countries, especially China, to understand where this capital, or worth, will come from. We'll get back to that in a while.
Thirdly, expanding the influence of the BRICS countries within the structure of the I.M.F. also "creates a fully elected Executive Board". The Executive Board of the I.M.F. is responsible for SDR allocation. Let that sink in for a moment. The BRICS countries are going to have an equal say on SDR allocation. The SDR is being built up as the world's reserve currency. The value of the SDR will be based on a basket of currencies. And the U.S. Treasury is pushing congress to make this happen.
On August 5, 2013, the Peoples Bank of China called for a "New Bretton Woods" system where the U.S. dollar would be removed as the world's primary reserve currency. It also called for an expanded usage of the SDR and for the new system to be supported by gold.
In Part Two, we will explore how the U.S. debt, being the liabilities of both the Treasury and the Federal Reserve, will be consolidated with the treasury bonds held by China and rolled into the new SDR system. – JC Collins
*******************************************************
So I think this pretty much establishes what the previous article posted by pmaitra states. Also, it has enough quotes and figures to establish that this is simply not wishful thinking. This article is continued in 4 more parts which I will post below.
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happy
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SDR’s and the New Bretton Woods – Part Two | philosophyofmetrics
"The creation of an international currency unit, based on the Keynesian proposal, is a bold initiative that requires extraordinary political vision and courage".
– Governor of the People's Bank of China
_______________________________________________________________________
The father wiped the dirt from his hands and reached into his pocket. Keeping his hand inside for a few moments, he knowingly glared down at the boy. The air was still, the boy eager, eyes wide, dancing back and forth on his feet.
"Come on Dad, my friends are waiting", explained the boy.
Slowly the father withdrew his hand and paused before dropping a few coins into his sons waiting hand.
"Are you going to spend it all at the corner store?"
"Yes," said the son.
"Money isn't easy to come by boy. It takes hard work to make money. You kids don't know the value of money. "
"I just want some pop and chips Dad, and maybe a comic book if I have enough."
"When I was you're age I could buy all that for a dime and a nickel", said the father.
The boy, perplexed, thought for a moment, "Why does it cost so much now Dad?"
The father leaned down and picked his shovel back up. "I don't know boy. Things just keep getting more expensive. I work harder but get less for my money. I'm tired."
The boy shrugged his shoulders and ran off to meet his friends. The father, disturbed deeply by something that he couldn't quite put his finger on, stared off into the distance. The faraway clouds were dark. It hurt his heart not to be able to answer the boy's questions. He pushed the shovel into the pile of dirt with a grunt. This dirt wasn't going to spread itself and the day was getting short.
The father in our brief story need not feel bad. What it is he doesn't understand is in fact a very complex system of social and economic engineering designed to maintain the most functional equilibrium between the balance of nature and desire, or brain and consciousness, logic and dreams.
The absolute board upon which reality is drawn has borders, and until such a time as consciousness is capable of expanding those borders (think of a balloon expanding) we are left with a system that can and will maintain the status quo, which is the system represented by the father above, spreading the dirt with a shovel, over the board of his reality. He senses a much bigger reality and bigger possibilities, but his limited capacity and reference point keep him from understanding the full scope of what surrounds him.
The system that surrounds all of us is still a mystery. Yet the economic portion of that system is slowly revealing itself. And it reveals itself through patterns. There are patterns everywhere. For the sake of argumentation, let's call them philosophical patterns. The obvious example in our lives of a philosophical pattern would be the connection between two of the largest events in our lives. These events are the birth and death of each one of us. We are born. We live a life. And we die.
This pattern is very similar to another pattern in our life. And that is sleep. We wake in the morning. Go about our day, and go back to sleep at night. This is why death is referred to as the great sleep. Sleep is the micro pattern of the macro death.
I will be expanding upon these sort of philosophical patterns in the future essay series titled the Grand Man. But for our purposes here, this example will suffice.
The patterns are everywhere and in everything. The complex system of economic and social engineering is no different. Remember the saying, "there is nothing new under the sun". It's true. There never is anything truly new. Everything in reality (and non-reality) is in transition, or motion. One thing gradually becomes something else.
Let's take the fall of the Roman Empire as our example here. There is no one specific time or date which can be defined as the moment the empire ended. Like the U.S. today, Rome degraded their currency through a slow process of minting contamination until full debasement of the Gold Aureus led the regions outside of Rome to use other forms of exchange. Once this happened, the barbarians slipped through the gates of the former empire one at a time, slowly debasing the population of the regions once controlled by Rome, before moving on to Rome itself.
Can we not see this same pattern with the increase of immigration in the western world? There are more than just philosophical patterns visible regarding this as well. Such as the inflation of the western world currencies being exported to the countries from which we import people back. Logically, there is a balancing of accounts taking place here.
So when we are attempting to understand the economic system that is being built up underneath the structure of the old one, we only need but look at what exists today to discern what is coming our way shortly.
The first thing to understand is how the Federal Reserve System actually works. There are many resources on the web to help you understand this if you don't already, so I will not explain it in detail. This is not a book, only an essay.
So in brief, the U.S government decides on a debt limit. They then issue Treasury Bonds of different yields to meet that limit. These Treasury bonds are purchased by the Federal Reserve (and China, Japan, etc..) and the money used to purchase them is created out of thin air and lent back to the government at the interest rate as defined on the yield of each bond. The government then prints the money and puts it into circulation.
So, say you were the government and you needed money to run your household. You go to the bank and borrow $10,000.00. The bank lends you this money at a yield, or interest rate. You have a predetermined number of years to pay this loan back. Your real money, being your labor and time, pays this loan back by creating the "energy" from which the value of the loan is extracted. Think of the human resources department at your local corporate office.
So in essence, the Federal Reserve System is the macro of your micro local bank. It works the same way.
Since there is nothing new under the sun, it can be reasoned that any new economic system will be the macro of, what now becomes, the micro Federal Reserve System. So for clarity, the Fed has been the macro pattern since 1944. But, like Rome, it has slowly been converting into the micro since 1971. Now we are in the final stages of this transition and the new macro is becoming visible for those with the eyes to see.
The new macro is of course the SDR (Special Drawing Right) issued by the International Monetary Fund.
So, we will attempt to keep this simple. Before the Federal Reserve there was still a system of debt creation. What the Fed system did was consolidate the debt in the country into a new system by which bonds were created and issued to banks, insurance companies, etc"¦ After the Bretton Woods agreement of 1944, the Fed went international. It's this process of becoming international (becoming the primary reserve currency for international trade) that is now transitioning into the larger pattern through the I.M.F. and the SDR's.
Not only the Federal Reserve, but all central banks of the world have created too much debt. And like before, the I.M.F. will now consolidate this sovereign debt into a supra-sovereign reserve currency by way of SDR securities, or otherwise SDR bonds.
Let us investigate this further.
The present value, or composition (get use to this term) of the SDR is determined by only 4 currencies. They are the U.S. dollar, the Euro (think basket of currencies micro pattern), Japanese Yen, and the British Pound (the old girl just won't quit).
With the implementation of the 2010 I.M.F. Code of Reforms discussed in part one of this series, this composition is about to change. The currencies of the BRICS countries will soon be added to this composition, along with other major economies. Perhaps Vietnam will be added to the composition.
The weights used to determine the value of each composition will also change. These changes will consist of the economic fundamentals, such as GDP, as well as other metrics, like human development, ecological sustainability, concentration and diffusion of assets and income, as well as the demographics of populations. Research each of these and apply what you learn to the overall social and humanity programs being injected into school curriculums. Remember the micro and macro patterns which endlessly weave through everything.
Also with the 2010 Code of Reforms, there will be no more western veto power within the Executive Board of the I.M.F. The geopolitical world will be balanced in preparation for the "great consolidation". SDR allocation (get use to this word also) will be controlled by those with the largest interest in the system. This large interest is no longer the micro Fed.
Part Two of this essay series is starting to get long so let's begin to wrap it up.
We know that through debt creation we are subjected to inflation. The more currency we print the less valuable that currency becomes. Like the father at the beginning having to pay more for goods and services. Like each micro to macro pattern before it, debt eventually needs to be consolidated and repackaged as new securities instruments - bonds. Sovereign debt will be consolidated and repackaged as SDR bonds. These offer new potential for energy storage. And remember energy (your time and labor) is real money.
But before these bonds can be issued, accounts require balancing. This is what we are seeing in the world right now. The gold is going east to China. New oil and gas deals are being brokered. Wealth is on the move, shifting and splashing around upon the sea of international understandings. Inflation is being sent back from whence it came. Currencies and commodities which have been artificially suppressed to support the now old micro will be expanding to reflect the new macro realities.
Debt balances will settle into new account holders before the system is locked down. Those with greater capacity for composition will swallow the old sovereign debts. The U.S. owes a great debt to China and because of this China is allowed to import all the gold. This gold will ensure the transfer of Fed liabilities to the Renminbi composition. The Renminbi will be international, the Yuan in house. Just like the dollar will be split into an international exchange and an in country exchange. The Treasury being severed from the Federal Reserve. The micro being severed from the macro.
All old sovereign debts, including historical bonds, like the Chinese 1913 Gold bonds, will be balanced before consolidation. All the countries of the world have been explored and their resources catalogued. Processes have been designed to produce those resources and bring them to market.
Central banks are increasing their holdings of Canadian and Australian dollars. These are two resource rich countries. Foreign reserves can also add to the composition of any one currency.
In Part 3 we will venture into the pipeline mechanics of SDR compositions, including historical bonds, resources and commodities, and the inevitability of the great consolidation. We will see how the U.S. market is beginning to open itself to the idea of SDR denominated bonds. It simply has no other choice. And we will learn how the SDR bonds will be issued by the Federal Reserve, the World Bank, the European Central Bank, and what will become the monster allocator of the Renminbi SDR composition – the BRICS Development Bank. – JC Collins
"The creation of an international currency unit, based on the Keynesian proposal, is a bold initiative that requires extraordinary political vision and courage".
– Governor of the People's Bank of China
_______________________________________________________________________
The father wiped the dirt from his hands and reached into his pocket. Keeping his hand inside for a few moments, he knowingly glared down at the boy. The air was still, the boy eager, eyes wide, dancing back and forth on his feet.
"Come on Dad, my friends are waiting", explained the boy.
Slowly the father withdrew his hand and paused before dropping a few coins into his sons waiting hand.
"Are you going to spend it all at the corner store?"
"Yes," said the son.
"Money isn't easy to come by boy. It takes hard work to make money. You kids don't know the value of money. "
"I just want some pop and chips Dad, and maybe a comic book if I have enough."
"When I was you're age I could buy all that for a dime and a nickel", said the father.
The boy, perplexed, thought for a moment, "Why does it cost so much now Dad?"
The father leaned down and picked his shovel back up. "I don't know boy. Things just keep getting more expensive. I work harder but get less for my money. I'm tired."
The boy shrugged his shoulders and ran off to meet his friends. The father, disturbed deeply by something that he couldn't quite put his finger on, stared off into the distance. The faraway clouds were dark. It hurt his heart not to be able to answer the boy's questions. He pushed the shovel into the pile of dirt with a grunt. This dirt wasn't going to spread itself and the day was getting short.
The father in our brief story need not feel bad. What it is he doesn't understand is in fact a very complex system of social and economic engineering designed to maintain the most functional equilibrium between the balance of nature and desire, or brain and consciousness, logic and dreams.
The absolute board upon which reality is drawn has borders, and until such a time as consciousness is capable of expanding those borders (think of a balloon expanding) we are left with a system that can and will maintain the status quo, which is the system represented by the father above, spreading the dirt with a shovel, over the board of his reality. He senses a much bigger reality and bigger possibilities, but his limited capacity and reference point keep him from understanding the full scope of what surrounds him.
The system that surrounds all of us is still a mystery. Yet the economic portion of that system is slowly revealing itself. And it reveals itself through patterns. There are patterns everywhere. For the sake of argumentation, let's call them philosophical patterns. The obvious example in our lives of a philosophical pattern would be the connection between two of the largest events in our lives. These events are the birth and death of each one of us. We are born. We live a life. And we die.
This pattern is very similar to another pattern in our life. And that is sleep. We wake in the morning. Go about our day, and go back to sleep at night. This is why death is referred to as the great sleep. Sleep is the micro pattern of the macro death.
I will be expanding upon these sort of philosophical patterns in the future essay series titled the Grand Man. But for our purposes here, this example will suffice.
The patterns are everywhere and in everything. The complex system of economic and social engineering is no different. Remember the saying, "there is nothing new under the sun". It's true. There never is anything truly new. Everything in reality (and non-reality) is in transition, or motion. One thing gradually becomes something else.
Let's take the fall of the Roman Empire as our example here. There is no one specific time or date which can be defined as the moment the empire ended. Like the U.S. today, Rome degraded their currency through a slow process of minting contamination until full debasement of the Gold Aureus led the regions outside of Rome to use other forms of exchange. Once this happened, the barbarians slipped through the gates of the former empire one at a time, slowly debasing the population of the regions once controlled by Rome, before moving on to Rome itself.
Can we not see this same pattern with the increase of immigration in the western world? There are more than just philosophical patterns visible regarding this as well. Such as the inflation of the western world currencies being exported to the countries from which we import people back. Logically, there is a balancing of accounts taking place here.
So when we are attempting to understand the economic system that is being built up underneath the structure of the old one, we only need but look at what exists today to discern what is coming our way shortly.
The first thing to understand is how the Federal Reserve System actually works. There are many resources on the web to help you understand this if you don't already, so I will not explain it in detail. This is not a book, only an essay.
So in brief, the U.S government decides on a debt limit. They then issue Treasury Bonds of different yields to meet that limit. These Treasury bonds are purchased by the Federal Reserve (and China, Japan, etc..) and the money used to purchase them is created out of thin air and lent back to the government at the interest rate as defined on the yield of each bond. The government then prints the money and puts it into circulation.
So, say you were the government and you needed money to run your household. You go to the bank and borrow $10,000.00. The bank lends you this money at a yield, or interest rate. You have a predetermined number of years to pay this loan back. Your real money, being your labor and time, pays this loan back by creating the "energy" from which the value of the loan is extracted. Think of the human resources department at your local corporate office.
So in essence, the Federal Reserve System is the macro of your micro local bank. It works the same way.
Since there is nothing new under the sun, it can be reasoned that any new economic system will be the macro of, what now becomes, the micro Federal Reserve System. So for clarity, the Fed has been the macro pattern since 1944. But, like Rome, it has slowly been converting into the micro since 1971. Now we are in the final stages of this transition and the new macro is becoming visible for those with the eyes to see.
The new macro is of course the SDR (Special Drawing Right) issued by the International Monetary Fund.
So, we will attempt to keep this simple. Before the Federal Reserve there was still a system of debt creation. What the Fed system did was consolidate the debt in the country into a new system by which bonds were created and issued to banks, insurance companies, etc"¦ After the Bretton Woods agreement of 1944, the Fed went international. It's this process of becoming international (becoming the primary reserve currency for international trade) that is now transitioning into the larger pattern through the I.M.F. and the SDR's.
Not only the Federal Reserve, but all central banks of the world have created too much debt. And like before, the I.M.F. will now consolidate this sovereign debt into a supra-sovereign reserve currency by way of SDR securities, or otherwise SDR bonds.
Let us investigate this further.
The present value, or composition (get use to this term) of the SDR is determined by only 4 currencies. They are the U.S. dollar, the Euro (think basket of currencies micro pattern), Japanese Yen, and the British Pound (the old girl just won't quit).
With the implementation of the 2010 I.M.F. Code of Reforms discussed in part one of this series, this composition is about to change. The currencies of the BRICS countries will soon be added to this composition, along with other major economies. Perhaps Vietnam will be added to the composition.
The weights used to determine the value of each composition will also change. These changes will consist of the economic fundamentals, such as GDP, as well as other metrics, like human development, ecological sustainability, concentration and diffusion of assets and income, as well as the demographics of populations. Research each of these and apply what you learn to the overall social and humanity programs being injected into school curriculums. Remember the micro and macro patterns which endlessly weave through everything.
Also with the 2010 Code of Reforms, there will be no more western veto power within the Executive Board of the I.M.F. The geopolitical world will be balanced in preparation for the "great consolidation". SDR allocation (get use to this word also) will be controlled by those with the largest interest in the system. This large interest is no longer the micro Fed.
Part Two of this essay series is starting to get long so let's begin to wrap it up.
We know that through debt creation we are subjected to inflation. The more currency we print the less valuable that currency becomes. Like the father at the beginning having to pay more for goods and services. Like each micro to macro pattern before it, debt eventually needs to be consolidated and repackaged as new securities instruments - bonds. Sovereign debt will be consolidated and repackaged as SDR bonds. These offer new potential for energy storage. And remember energy (your time and labor) is real money.
But before these bonds can be issued, accounts require balancing. This is what we are seeing in the world right now. The gold is going east to China. New oil and gas deals are being brokered. Wealth is on the move, shifting and splashing around upon the sea of international understandings. Inflation is being sent back from whence it came. Currencies and commodities which have been artificially suppressed to support the now old micro will be expanding to reflect the new macro realities.
Debt balances will settle into new account holders before the system is locked down. Those with greater capacity for composition will swallow the old sovereign debts. The U.S. owes a great debt to China and because of this China is allowed to import all the gold. This gold will ensure the transfer of Fed liabilities to the Renminbi composition. The Renminbi will be international, the Yuan in house. Just like the dollar will be split into an international exchange and an in country exchange. The Treasury being severed from the Federal Reserve. The micro being severed from the macro.
All old sovereign debts, including historical bonds, like the Chinese 1913 Gold bonds, will be balanced before consolidation. All the countries of the world have been explored and their resources catalogued. Processes have been designed to produce those resources and bring them to market.
Central banks are increasing their holdings of Canadian and Australian dollars. These are two resource rich countries. Foreign reserves can also add to the composition of any one currency.
In Part 3 we will venture into the pipeline mechanics of SDR compositions, including historical bonds, resources and commodities, and the inevitability of the great consolidation. We will see how the U.S. market is beginning to open itself to the idea of SDR denominated bonds. It simply has no other choice. And we will learn how the SDR bonds will be issued by the Federal Reserve, the World Bank, the European Central Bank, and what will become the monster allocator of the Renminbi SDR composition – the BRICS Development Bank. – JC Collins
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SDR’s and the New Bretton Woods – Part Three | philosophyofmetrics
Have no doubt about it, the so called Global Currency Reset is already happening, and it's happening by the International Monetary Fund restructuring the world's wealth through the emerging markets. Sovereign debt is at a 200 year high. Fiat currencies are on the verge of collapse. Stock markets are hovering over nothing but the illusionary ether from which they climbed. And if you listen carefully you'll notice that all countries are speaking from the same script.
So how did we get here?
Though this is a multi-part series, all the other essays on philosophyofmetrics.com have something to do with the process which has come to be called the Global Currency Reset or the Great Consolidation. Such a complex process is not easily understood or easily explained.
Revolutions are ideal methods to exact transformation upon a civilization. The banking powers which still control the world today gained that control through revolutions such as the French Revolution, the Bolshevik Revolution, etc. They are working within the same methodology today.
We are seeing mass protests against governments for the sovereign debt problem which is threatening the world with total collapse. What is little understood by the majority of the people is that the sovereign debt problems are being caused and facilitated by the very same banks that will stand to gain from any global currency reset. The reset will be the solution offered in response to the reaction of the people, being the protests and revolutions, which stems from the problem of sovereign debt and currency collapse.
Can we not see through the smoke and mirrors too observe the obviousness of the Hegelian Dialectic at play? The banks take control of most of the countries of the world through revolution, war, famine, economic sanctions, and then set up central banks in these countries. The central bank of each country quickly gets to work on lending the government of their respective countries the debt money it needs to function and maintain the carefully engineered economic equilibrium of the population.
Eventually sovereign debt becomes too large and the whole system is threatened with collapse.
Once again, how did we come to be here?
What we are witnessing is a carefully worded script to effect the problem, reaction, solution of the Hegelian Dialectic. This script is being written by the Bank for International Settlements. The B.I.S. decides and disseminates all central banking policies and regulations for the central banks of each country in the world.
Today's "problem" began, for the most part, with the 1988 Basel Accord. This accord was engineered by the B.I.S. through its main location in Basel, Switzerland. The Basel One regulation set minimum capital requirements for the central banks of the world. This policy was trickled down to the chartered banks within each country. On the surface Basel One appeared harmless.
It wasn't until the Basel Two regulations came out many years later that the first red flag should have been noticed. This regulation, along with the minimum requirements of Basel One, allowed the banks to increase their risk by way of leverage and investments. It can be argued that Basel Two regulations were directly responsible for the subprime mortgage crisis of 2008. Therein the "problem" is given full birth.
From then on the "problem" develops into corporate bail-outs and eventually onto the sovereign debt crisis we are facing today.
The solution is found in the Basel Three regulations. In brief, these regulations force banks to increase assets and lays out the structure for currencies to become commodity supported. It is in this regulation that the Bank for International Settlements puts forth the final stage to the great consolidation, of which the global currency reset is but one part.
It's interesting that many on the internet are saying that the banking powers of the world are about to be overthrown because of the Basel Three regulations and the economic reset which will come as a product of its full implementation by 2018. Isn't it recognized that the Basel Three regulations are a product of those same banking powers? They're certainly not overthrowing themselves.
What is happening is the tightening down of the bolts, the closing of loopholes, and the streamlining of processes. When it's all said and done, the Bank for International Settlements will have more control than they do today. Period.
With that being said, there is evidence of negotiations taking place behinds the scenes. Let's not rely on rumor and internet conjecture for this evidence. Let's go directly to the International Monetary Fund itself.
In the I.M.F. press release dated January 23rd, 2014, it states the following:
"The Executive Board reiterates the importance and urgency of the 2010 Reforms for strengthening the Fund's effectiveness and legitimacy. This includes ensuring that, as a quota-based institution, the Fund has sufficient permanent resources to meet members' needs and that its governance structure evolves in line with members' changing positions in the world economy."
What they are saying here is that the implementation of the new Executive Board, which includes China and other BRICS countries (See SDR's and the New Bretton Woods – Part One) needs to happen as soon as possible. These new members will make much needed capital injections into the quota fund to meet overall member needs. Here we need to consider the sovereign debt of all the countries of the world and the consolidation of this debt through the I.M.F. as it was designed to be. It also makes clear that the governance structure of the Executive Board will reflect the "members changing positions in the world economy".
Let's continue with the press release.
"The Executive Board proposes that the deadline for the completion of the Fifteenth Review be moved from January 2014 to January 2015. Furthermore, the Executive Board recognizes that the immediate priority is the effectiveness of the Fourteenth Review and Board Reform Amendment. Accordingly, the Executive Board proposes that the Board of Governors adopt a Resolution expressing its deep regret that the Fourteenth Review and the Board Reform Amendment have not become effective and urge the remaining members who have not yet accepted the Fourteenth Review quota increases and the Board Reform Amendment to do so without further delay".
So in the first sentence the I.M.F. is clearly suggesting that the deadline for the economic reset be pushed out to January, 2015. On top of that, it's calling for a "resolution" expressing their disappointment that some members have yet to accept the new quota regulations and are pushing those members to implement the changes "without further delay".
Don't let the "quota increases" term fool you. What they are talking about here is surrender of the economic sovereignty of member countries. In this simple term will be found the passage of ownership over the Federal Reserve System to foreign powers. And remember, as we learned in Part One of this series, Jack Lew of the Treasury is pushing Congress to pass legislation which will support what the I.M.F. is requesting.
As we move through the year and get closer and closer to the Great Consolidation it will be important to remain focused on what is really happening. The Great Consolidation will be the relinquishing of sovereignty and the Global Currency Reset will be one of the major steps towards this end.
We will hear more of the sovereign debt issue. We will witness the turmoil of the currency exchange markets. Revolutions will take place on the television right before our eyes. The people of the world will be told daily that the collapse of the whole system is imminent. At some point, the negotiations hinted at above will be concluded. The currencies of the world will be revalued and the debts of the world consolidated.
Make no mistake about it, the Global Currency Reset and the Great Consolidation will mean the end of sovereignty, including the sovereignty of the United States.
And at the same time, all the countries of the world continue to develop police state procedures along with the implementation of technologies to ensure successful management of the "reaction" stage of the Hegelian Dialectic Triad.
This is the real Global Currency Reset. Order out of chaos.
There were other matters which I wanted to cover in part three of this series. But I felt it was important to set a few things straight about the reset first. In the next installment we will get back on track and delve once again into the structure of SDR compositions. We will take a closer look at specific regions, including Canada and the Keystone XL Pipeline, agreements between Iraq and Iran on oil strategies (hint: so called "dinarians" are not going to be happy), and how all sovereign debts, including historical bonds, will be included in the Great Consolidation. – JC Collins
Have no doubt about it, the so called Global Currency Reset is already happening, and it's happening by the International Monetary Fund restructuring the world's wealth through the emerging markets. Sovereign debt is at a 200 year high. Fiat currencies are on the verge of collapse. Stock markets are hovering over nothing but the illusionary ether from which they climbed. And if you listen carefully you'll notice that all countries are speaking from the same script.
So how did we get here?
Though this is a multi-part series, all the other essays on philosophyofmetrics.com have something to do with the process which has come to be called the Global Currency Reset or the Great Consolidation. Such a complex process is not easily understood or easily explained.
Revolutions are ideal methods to exact transformation upon a civilization. The banking powers which still control the world today gained that control through revolutions such as the French Revolution, the Bolshevik Revolution, etc. They are working within the same methodology today.
We are seeing mass protests against governments for the sovereign debt problem which is threatening the world with total collapse. What is little understood by the majority of the people is that the sovereign debt problems are being caused and facilitated by the very same banks that will stand to gain from any global currency reset. The reset will be the solution offered in response to the reaction of the people, being the protests and revolutions, which stems from the problem of sovereign debt and currency collapse.
Can we not see through the smoke and mirrors too observe the obviousness of the Hegelian Dialectic at play? The banks take control of most of the countries of the world through revolution, war, famine, economic sanctions, and then set up central banks in these countries. The central bank of each country quickly gets to work on lending the government of their respective countries the debt money it needs to function and maintain the carefully engineered economic equilibrium of the population.
Eventually sovereign debt becomes too large and the whole system is threatened with collapse.
Once again, how did we come to be here?
What we are witnessing is a carefully worded script to effect the problem, reaction, solution of the Hegelian Dialectic. This script is being written by the Bank for International Settlements. The B.I.S. decides and disseminates all central banking policies and regulations for the central banks of each country in the world.
Today's "problem" began, for the most part, with the 1988 Basel Accord. This accord was engineered by the B.I.S. through its main location in Basel, Switzerland. The Basel One regulation set minimum capital requirements for the central banks of the world. This policy was trickled down to the chartered banks within each country. On the surface Basel One appeared harmless.
It wasn't until the Basel Two regulations came out many years later that the first red flag should have been noticed. This regulation, along with the minimum requirements of Basel One, allowed the banks to increase their risk by way of leverage and investments. It can be argued that Basel Two regulations were directly responsible for the subprime mortgage crisis of 2008. Therein the "problem" is given full birth.
From then on the "problem" develops into corporate bail-outs and eventually onto the sovereign debt crisis we are facing today.
The solution is found in the Basel Three regulations. In brief, these regulations force banks to increase assets and lays out the structure for currencies to become commodity supported. It is in this regulation that the Bank for International Settlements puts forth the final stage to the great consolidation, of which the global currency reset is but one part.
It's interesting that many on the internet are saying that the banking powers of the world are about to be overthrown because of the Basel Three regulations and the economic reset which will come as a product of its full implementation by 2018. Isn't it recognized that the Basel Three regulations are a product of those same banking powers? They're certainly not overthrowing themselves.
What is happening is the tightening down of the bolts, the closing of loopholes, and the streamlining of processes. When it's all said and done, the Bank for International Settlements will have more control than they do today. Period.
With that being said, there is evidence of negotiations taking place behinds the scenes. Let's not rely on rumor and internet conjecture for this evidence. Let's go directly to the International Monetary Fund itself.
In the I.M.F. press release dated January 23rd, 2014, it states the following:
"The Executive Board reiterates the importance and urgency of the 2010 Reforms for strengthening the Fund's effectiveness and legitimacy. This includes ensuring that, as a quota-based institution, the Fund has sufficient permanent resources to meet members' needs and that its governance structure evolves in line with members' changing positions in the world economy."
What they are saying here is that the implementation of the new Executive Board, which includes China and other BRICS countries (See SDR's and the New Bretton Woods – Part One) needs to happen as soon as possible. These new members will make much needed capital injections into the quota fund to meet overall member needs. Here we need to consider the sovereign debt of all the countries of the world and the consolidation of this debt through the I.M.F. as it was designed to be. It also makes clear that the governance structure of the Executive Board will reflect the "members changing positions in the world economy".
Let's continue with the press release.
"The Executive Board proposes that the deadline for the completion of the Fifteenth Review be moved from January 2014 to January 2015. Furthermore, the Executive Board recognizes that the immediate priority is the effectiveness of the Fourteenth Review and Board Reform Amendment. Accordingly, the Executive Board proposes that the Board of Governors adopt a Resolution expressing its deep regret that the Fourteenth Review and the Board Reform Amendment have not become effective and urge the remaining members who have not yet accepted the Fourteenth Review quota increases and the Board Reform Amendment to do so without further delay".
So in the first sentence the I.M.F. is clearly suggesting that the deadline for the economic reset be pushed out to January, 2015. On top of that, it's calling for a "resolution" expressing their disappointment that some members have yet to accept the new quota regulations and are pushing those members to implement the changes "without further delay".
Don't let the "quota increases" term fool you. What they are talking about here is surrender of the economic sovereignty of member countries. In this simple term will be found the passage of ownership over the Federal Reserve System to foreign powers. And remember, as we learned in Part One of this series, Jack Lew of the Treasury is pushing Congress to pass legislation which will support what the I.M.F. is requesting.
As we move through the year and get closer and closer to the Great Consolidation it will be important to remain focused on what is really happening. The Great Consolidation will be the relinquishing of sovereignty and the Global Currency Reset will be one of the major steps towards this end.
We will hear more of the sovereign debt issue. We will witness the turmoil of the currency exchange markets. Revolutions will take place on the television right before our eyes. The people of the world will be told daily that the collapse of the whole system is imminent. At some point, the negotiations hinted at above will be concluded. The currencies of the world will be revalued and the debts of the world consolidated.
Make no mistake about it, the Global Currency Reset and the Great Consolidation will mean the end of sovereignty, including the sovereignty of the United States.
And at the same time, all the countries of the world continue to develop police state procedures along with the implementation of technologies to ensure successful management of the "reaction" stage of the Hegelian Dialectic Triad.
This is the real Global Currency Reset. Order out of chaos.
There were other matters which I wanted to cover in part three of this series. But I felt it was important to set a few things straight about the reset first. In the next installment we will get back on track and delve once again into the structure of SDR compositions. We will take a closer look at specific regions, including Canada and the Keystone XL Pipeline, agreements between Iraq and Iran on oil strategies (hint: so called "dinarians" are not going to be happy), and how all sovereign debts, including historical bonds, will be included in the Great Consolidation. – JC Collins
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- Joined
- Mar 12, 2013
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SDR’s and the New Bretton Woods – Part Four | philosophyofmetrics
"This is really an old lesson for a new era. At such a momentous time as this, we need to choose the ethos of 1944 over 1914. We need to rekindle the Bretton Woods spirit that has served us so well."
- Christine Lagarde, Managing Director of the I.M.F. Feb 3, 2014.
As young boys my brother and I delivered newspapers in our neighborhood. There was one house in particular that always stood out to us. In this home lived a man with no legs. The house was your standard suburban build of the 1970's and had a ramp running up the width of the front. The man in his wheelchair would often be parked at the small area at the top of the ramp. It was a short landing from which he could enter the house.
Bad feelings always came over me every time we delivered the newspaper there. My memory tells me that the man wasn't very nice, though I'm sure he was and that's just how I remember it based on my own feelings of uneasiness.
When we see a man in a wheelchair we often think of war vets. In this case the man had lost his legs in a mining accident. There is a giant mining machine called a bucket wheel. It's exactly what it sounds like, a large wheel made up of many buckets which dig into the earth as it turns. This man had the unfortunate accident of being in a pickup truck that came into contact with the mining machine.
Our father also worked at the same mine and over the years of our childhood there were many such accidents, some ending in deaths and others causing life altering trauma like the man on the porch. Fear was something I often felt as I stared out the window and watched my father walk off to catch the bus which transported all the workers to the mine site. The thought of my father being one of the men who didn't come home was unbearable.
As dangerous as it was, my father worked hard and provided for his family. We had a good childhood. A good life. Though I didn't understand it at the time, the world needed energy and my father helped provide it by exacting his own energy. My brother and I didn't put out as much energy delivering newspapers because we were lazy, as children are want to be, but we would eventually get paid for what little energy we did exert. That's how it works right, exert first and earn after.
Along with listening to ABBA songs for the better part of the early 1980's, I also watched the endless Iraq and Iran war on television. The ability to fully comprehend what it was all about only came to me when I was much older. The concept of the petrodollar was kept out of the media at all costs. The fact that the American military would support one oil producing country to attack another oil producing country was too complex a thing to grasp while the song Waterloo spun on the record player.
For those who don't know, the petrodollar was an agreement between the Federal Reserve and Saudi Arabia to price and sell oil in U.S. dollars. This scheme came about after the dollar was disconnected from its 30% gold peg in 1971. By 1973 the scam was on and most of the oil producing countries fell in line. Unfortunately Iran didn't get the memo.
We'll avoid a long history of oil shenanigans and military occupations. Please feel free to research and filter all Middle Eastern conflicts through the petrodollar smoke screen. I would include the Caspian Basin and Bosnian conflict in this as well.
Two nights ago Christine Lagarde of the International Monetary Fund was giving a speech in London. In that speech she made many references to the outdated system that has been in place since the Bretton Woods agreement of 1944. She explains how that agreement has served us well for the last 70 years but it is now time to move on with a new multilateral system, a "financial system for the 21st century". Near the end of her talk Ms. Lagarde boldly states that a new multilateralism is "non-negotiable".
What she is saying is that both the old Bretton Woods arrangement and by default the petrodollar scheme are dead and over. Like the British Pound before 1944, the reserve status of the American dollar is over. It's just that American's have not accepted it yet because the leaders of the country have not told them about it.
There are too many currency swap agreements which have been made over the last few years to even mention. The function of these swap agreements have been to avoid using the dollar in trade. The emerging economies have planned their counter to QE tapering like a general strategizing a flank maneuver. If it was not for these currency swap agreements the emerging markets would be suffering more right now.
But let us kept our eye on the moving ball here and remember the problem, reaction, solution technique we have been discussing in previous posts. Since we are suggesting that all sides are reading from the same script, I will put forward that the script is in fact the 2010 I.M.F. Code of Reforms.
The United States is the last hold out on the Reforms. The Congress has to pass the legislation in order for the 2010 Code of Reforms to be fully enacted and the required changes to the Executive Board of the I.M.F. completed. As some of you may have already guessed, and not to put too fine a point on this, the Reforms will allow for the following things to happen:
1. Restructure U.S. sovereign debt. (other countries as well)
2. Final payout on historical bonds.
3. Revaluation of currencies.
4. Preliminary SDR bond agreements.
5. Soft landing for stock markets.
From there the real work will begin as SDR allocation sites are strategically located. As stated previous, the "restructured" Fed will issue SDR securities along with the World Bank, European Central Bank, and the BRICS Development Bank. There will be others but those are the core institutions.
SDR compositions for each country and economic zone will continue to be analysed and negotiated as trade shifts and settles to the new paradigm. Gold will obviously be a vital component of most SDR compositions, especially in Asia, where strategically located gold vaults are now being set up in China, Vietnam, Indonesia, etc. This was explained with more detail in "America's Karma and World War Two Gold Theft".
Commodities other than gold will also factor into SDR composition weights. One of these is oil. With oil comes different challenges than some of the other weights. Let's take the relationship between the United States and Canada as an example. Oil is pumped or mined in one place and after initial processing, is shipped elsewhere for further processing for a market grade product.
This is where the Keystone XL Pipeline comes in. The purpose of the pipeline is to transport semi-processed oil from the Canadian Oil Sands to the refineries in the gulf region of America. There is much to do about nothing over this "proposed" pipeline. Just as there is about the Oil Sands in general. Why do you think this is? It's a negotiation over what percentage of the produced oil will be applied to the SDR composition of each country. Should Canada get more for mining and partial processing? Or should America for bringing it to market?
All along, even with the delays and drama over both the pipeline and the oil sands, Keystone is in fact moving ahead with major portions of the line already completed. The so called Obama drag on this is only for show.
In addition to Keystone, Canada is also building what is called the Northern Gateway Pipeline to transport oil from Northern Alberta to the Pacific coast for shipping to the Asian market. This is why China is becoming heavily invested in Canadian oil and its related infrastructure.
Intangible SDR trading is already going on outside of the U.S. dollar. The exact same thing happened to the British Pound in the years leading up to its official demise as the reserve currency of the world.
Let's move on to Iraq and Iran. It was reported on January 30th that Iraq and Iran where planning on joining forces and cutting world oil prices as a form of economic warfare on Saudi Arabia. The purpose is to destroy OPECs control over the world oil market. As usual, things are not as they appear. OPEC is already dead for the most part and Saudi Arabia is aligning itself with China.
This is major news that is lost on not only Americans but many other regions as well. With the shattering of OPEC who will dictate the price of oil? There are a few different exchanges which price oil and I would suspect that eventually there will be just one in order to facilitate more accurate SDR compositions for oil producing nations.
The bigger question to ask here is how do two countries that fought a war with each other for almost a decade suddenly decide that they will become the dynamic duo to fight the evil Saudi sheiks? There's a micro problem, reaction, solution taking place here. I propose that the Middle East will be split into two economic zones with the Lower Middle East encompassing oil production from Saudi Arabia and Northern Africa, while the Upper Middle East will consolidate not only Iraq and Iran but most likely the Caspian region as well. Remember, civilizations are transformed through revolutions. There is more to the Arab Spring than many realize.
Though the world's countries will maintain their individual autonomy, their economic sovereignty will be passed to the Executive Board of the I.M.F. under the 2010 Code of Reforms. As such, the oil produced from the economic zones will not apply directly to the individual countries SDR composition but to the regions composition. Both Iraq and Iran are oil rich in resource but the ability to bring it to market, especially in Iraq, is still fraught with challenges. The world will not wait for stability in Iraq before implementing the Code of Reforms which will in turn lead to the Global Currency Reset and the Great Consolidation.
Iraq's currency, the Dinar, will be revalued, of that there is no doubt. But not anywhere near the exchange rate that many are predicting. Like my brother and I delivering newspapers, we could not get paid until the papers were distributed and payments collected. The dinar will not be revalued at a rate that cannot be supported by the actual production of the oil. Both Iraq and Iran are looking forward to 2020 to even come close to the barrels per day production that Saudi Arabia has now.
In addition, I would suspect that a regional dinar currency will be developed to support the economic zones SDR composition. And that is good news for many that hold dinar. It will be revalued sooner rather than later and it will offer a great return, but only as the micro of a larger macro and regional dinar scenario.
I encourage everyone reading my blog posts to educate yourself and research as much as possible. Everything we need to know in order to understand what is coming is published and available. The reset is real, as is the consolidation. The centralization of economic power is worrisome but I fear the alternative at this point in history offers a less desirable outcome. How we handle ourselves as human beings will dictate how we challenge that centralization. Do we fight as desperate and divided buffoons who are lost in the ignorance of the past? Or do we become knowledgeable and stare the system in the face and challenge it to become better?
The latter is much preferable as far as I'm concerned. And we accomplish this by challenging ourselves first. Like I wrote of in my post "The Failed Alchemical Process of America", the failure of America is the failure of us all. The journey from base metal to gold is the responsibility of each one of us. How do we expect a system based on greed to change when we ourselves are consumed with our obsession over matter? It matters not what the I.M.F. or any other organization does. We are the solution we've been looking for. Exert your energy for the wealth of knowledge.
In the next part we will continue with the SDR compositions but also start to touch on some of the cultural ramifications of the Great Consolidation. – JC Collins
"This is really an old lesson for a new era. At such a momentous time as this, we need to choose the ethos of 1944 over 1914. We need to rekindle the Bretton Woods spirit that has served us so well."
- Christine Lagarde, Managing Director of the I.M.F. Feb 3, 2014.
As young boys my brother and I delivered newspapers in our neighborhood. There was one house in particular that always stood out to us. In this home lived a man with no legs. The house was your standard suburban build of the 1970's and had a ramp running up the width of the front. The man in his wheelchair would often be parked at the small area at the top of the ramp. It was a short landing from which he could enter the house.
Bad feelings always came over me every time we delivered the newspaper there. My memory tells me that the man wasn't very nice, though I'm sure he was and that's just how I remember it based on my own feelings of uneasiness.
When we see a man in a wheelchair we often think of war vets. In this case the man had lost his legs in a mining accident. There is a giant mining machine called a bucket wheel. It's exactly what it sounds like, a large wheel made up of many buckets which dig into the earth as it turns. This man had the unfortunate accident of being in a pickup truck that came into contact with the mining machine.
Our father also worked at the same mine and over the years of our childhood there were many such accidents, some ending in deaths and others causing life altering trauma like the man on the porch. Fear was something I often felt as I stared out the window and watched my father walk off to catch the bus which transported all the workers to the mine site. The thought of my father being one of the men who didn't come home was unbearable.
As dangerous as it was, my father worked hard and provided for his family. We had a good childhood. A good life. Though I didn't understand it at the time, the world needed energy and my father helped provide it by exacting his own energy. My brother and I didn't put out as much energy delivering newspapers because we were lazy, as children are want to be, but we would eventually get paid for what little energy we did exert. That's how it works right, exert first and earn after.
Along with listening to ABBA songs for the better part of the early 1980's, I also watched the endless Iraq and Iran war on television. The ability to fully comprehend what it was all about only came to me when I was much older. The concept of the petrodollar was kept out of the media at all costs. The fact that the American military would support one oil producing country to attack another oil producing country was too complex a thing to grasp while the song Waterloo spun on the record player.
For those who don't know, the petrodollar was an agreement between the Federal Reserve and Saudi Arabia to price and sell oil in U.S. dollars. This scheme came about after the dollar was disconnected from its 30% gold peg in 1971. By 1973 the scam was on and most of the oil producing countries fell in line. Unfortunately Iran didn't get the memo.
We'll avoid a long history of oil shenanigans and military occupations. Please feel free to research and filter all Middle Eastern conflicts through the petrodollar smoke screen. I would include the Caspian Basin and Bosnian conflict in this as well.
Two nights ago Christine Lagarde of the International Monetary Fund was giving a speech in London. In that speech she made many references to the outdated system that has been in place since the Bretton Woods agreement of 1944. She explains how that agreement has served us well for the last 70 years but it is now time to move on with a new multilateral system, a "financial system for the 21st century". Near the end of her talk Ms. Lagarde boldly states that a new multilateralism is "non-negotiable".
What she is saying is that both the old Bretton Woods arrangement and by default the petrodollar scheme are dead and over. Like the British Pound before 1944, the reserve status of the American dollar is over. It's just that American's have not accepted it yet because the leaders of the country have not told them about it.
There are too many currency swap agreements which have been made over the last few years to even mention. The function of these swap agreements have been to avoid using the dollar in trade. The emerging economies have planned their counter to QE tapering like a general strategizing a flank maneuver. If it was not for these currency swap agreements the emerging markets would be suffering more right now.
But let us kept our eye on the moving ball here and remember the problem, reaction, solution technique we have been discussing in previous posts. Since we are suggesting that all sides are reading from the same script, I will put forward that the script is in fact the 2010 I.M.F. Code of Reforms.
The United States is the last hold out on the Reforms. The Congress has to pass the legislation in order for the 2010 Code of Reforms to be fully enacted and the required changes to the Executive Board of the I.M.F. completed. As some of you may have already guessed, and not to put too fine a point on this, the Reforms will allow for the following things to happen:
1. Restructure U.S. sovereign debt. (other countries as well)
2. Final payout on historical bonds.
3. Revaluation of currencies.
4. Preliminary SDR bond agreements.
5. Soft landing for stock markets.
From there the real work will begin as SDR allocation sites are strategically located. As stated previous, the "restructured" Fed will issue SDR securities along with the World Bank, European Central Bank, and the BRICS Development Bank. There will be others but those are the core institutions.
SDR compositions for each country and economic zone will continue to be analysed and negotiated as trade shifts and settles to the new paradigm. Gold will obviously be a vital component of most SDR compositions, especially in Asia, where strategically located gold vaults are now being set up in China, Vietnam, Indonesia, etc. This was explained with more detail in "America's Karma and World War Two Gold Theft".
Commodities other than gold will also factor into SDR composition weights. One of these is oil. With oil comes different challenges than some of the other weights. Let's take the relationship between the United States and Canada as an example. Oil is pumped or mined in one place and after initial processing, is shipped elsewhere for further processing for a market grade product.
This is where the Keystone XL Pipeline comes in. The purpose of the pipeline is to transport semi-processed oil from the Canadian Oil Sands to the refineries in the gulf region of America. There is much to do about nothing over this "proposed" pipeline. Just as there is about the Oil Sands in general. Why do you think this is? It's a negotiation over what percentage of the produced oil will be applied to the SDR composition of each country. Should Canada get more for mining and partial processing? Or should America for bringing it to market?
All along, even with the delays and drama over both the pipeline and the oil sands, Keystone is in fact moving ahead with major portions of the line already completed. The so called Obama drag on this is only for show.
In addition to Keystone, Canada is also building what is called the Northern Gateway Pipeline to transport oil from Northern Alberta to the Pacific coast for shipping to the Asian market. This is why China is becoming heavily invested in Canadian oil and its related infrastructure.
Intangible SDR trading is already going on outside of the U.S. dollar. The exact same thing happened to the British Pound in the years leading up to its official demise as the reserve currency of the world.
Let's move on to Iraq and Iran. It was reported on January 30th that Iraq and Iran where planning on joining forces and cutting world oil prices as a form of economic warfare on Saudi Arabia. The purpose is to destroy OPECs control over the world oil market. As usual, things are not as they appear. OPEC is already dead for the most part and Saudi Arabia is aligning itself with China.
This is major news that is lost on not only Americans but many other regions as well. With the shattering of OPEC who will dictate the price of oil? There are a few different exchanges which price oil and I would suspect that eventually there will be just one in order to facilitate more accurate SDR compositions for oil producing nations.
The bigger question to ask here is how do two countries that fought a war with each other for almost a decade suddenly decide that they will become the dynamic duo to fight the evil Saudi sheiks? There's a micro problem, reaction, solution taking place here. I propose that the Middle East will be split into two economic zones with the Lower Middle East encompassing oil production from Saudi Arabia and Northern Africa, while the Upper Middle East will consolidate not only Iraq and Iran but most likely the Caspian region as well. Remember, civilizations are transformed through revolutions. There is more to the Arab Spring than many realize.
Though the world's countries will maintain their individual autonomy, their economic sovereignty will be passed to the Executive Board of the I.M.F. under the 2010 Code of Reforms. As such, the oil produced from the economic zones will not apply directly to the individual countries SDR composition but to the regions composition. Both Iraq and Iran are oil rich in resource but the ability to bring it to market, especially in Iraq, is still fraught with challenges. The world will not wait for stability in Iraq before implementing the Code of Reforms which will in turn lead to the Global Currency Reset and the Great Consolidation.
Iraq's currency, the Dinar, will be revalued, of that there is no doubt. But not anywhere near the exchange rate that many are predicting. Like my brother and I delivering newspapers, we could not get paid until the papers were distributed and payments collected. The dinar will not be revalued at a rate that cannot be supported by the actual production of the oil. Both Iraq and Iran are looking forward to 2020 to even come close to the barrels per day production that Saudi Arabia has now.
In addition, I would suspect that a regional dinar currency will be developed to support the economic zones SDR composition. And that is good news for many that hold dinar. It will be revalued sooner rather than later and it will offer a great return, but only as the micro of a larger macro and regional dinar scenario.
I encourage everyone reading my blog posts to educate yourself and research as much as possible. Everything we need to know in order to understand what is coming is published and available. The reset is real, as is the consolidation. The centralization of economic power is worrisome but I fear the alternative at this point in history offers a less desirable outcome. How we handle ourselves as human beings will dictate how we challenge that centralization. Do we fight as desperate and divided buffoons who are lost in the ignorance of the past? Or do we become knowledgeable and stare the system in the face and challenge it to become better?
The latter is much preferable as far as I'm concerned. And we accomplish this by challenging ourselves first. Like I wrote of in my post "The Failed Alchemical Process of America", the failure of America is the failure of us all. The journey from base metal to gold is the responsibility of each one of us. How do we expect a system based on greed to change when we ourselves are consumed with our obsession over matter? It matters not what the I.M.F. or any other organization does. We are the solution we've been looking for. Exert your energy for the wealth of knowledge.
In the next part we will continue with the SDR compositions but also start to touch on some of the cultural ramifications of the Great Consolidation. – JC Collins
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SDR’s and the New Bretton Woods – Part Five | philosophyofmetrics
At first there was nothing but an absolute whiteness. It was an endless emptiness of infinite possibility. With a whisper there appeared a single black dot in the middle of the white vastness. The dot was less than – but would become more. The whisper echoed throughout the absolute and the dot smeared outward from both sides becoming a line. The single line filled the void with purpose and direction.
The line eventually duplicated itself followed by the two opposing ends turning inwards and outwards until they touched each other forming a letter "L" shape. The whisper sound returned but louder this time. The "L" shape also duplicated itself with only one of the two turning itself opposite until all four ends of both shapes connected forming a square.
The square sat in the whiteness of the absolute. It was both large and small at the same time. An impossible translucence that was almost solid.
My first thought was one of curiosity as I studied the square. Time was of no relevance so I do not know how long I stared at the shape before it also began to transition into something more than. I watched as the square duplicated itself five times. This made a total of six squares which floated in the absolute. All seemed to change size from small to large before finally positioning themselves into a conjoining shape.
The cube solidified in my mind's eye as I began to differentiate patterns in the sound of the whisper. Some patterns made me feel sad while others brought feelings of security and comfort. As the whisper became a voice, and the voice a language, I felt the cube pull me into its center. There in the center of the cube I waited and watched as other shapes and colors formed outside the cube.
One by one the cube pulled the other shapes into its confined vastness. All the shapes of varying sizes and colors became a blur of motion. The motion also took on patterns which I slowly began to recognize as things of importance. The sensation of heaviness enveloped me.
There was hunger and tears.
Seeking out pleasure I roamed around in my heaviness, grabbing at objects, touching, smelling, and hearing distant sounds of satisfaction. Always one object became another until there was a chorus of material piling up around me. But always the pattern repeated. Endless, back into the infinite possibility from which it came.
In my early years I knew on a deep level that the world was not as it was presented to me by others. Giants walked around inside my world planting seeds from which truth would eventually blossom. But the truth would never come. The giants became smaller and smaller as I grew larger and larger. And the truth seemed to be lost within the geometric shapes that made up the material world around me.
It would take many years for the truth to be extracted from the patterns. And at times the truth would hide itself within false truths and sink back into the patterns. Many would waste valuable time and energy to pull forth false truths while the true truths lay embedded deep within the subconscious of our minds. The greatest true truth of all is the infinite possibility of the absolute just before the black dot materialized.
Like the black dot, fiat currencies are a false truth. Yet they are what we collectively gravitate towards in times of massive centralization. History proves this pattern. So what will it take for the world to back away from the fiat currency and transition to a more stable shape?
In the other parts to this series, we have discussed the 2010 Code of Reforms as agreed upon by the members of the International Monetary Fund. Though the agreements were made, the United States Congress has yet to pass the supporting legislation required to restructure the Executive Board of the I.M.F. The obvious reason for this is that once the reforms are passed and the board restructured the quotas for each country will change and the dollar will be stripped of its reserve currency status.
Congress knows this all too well and is pushing negotiations into dangerous territory as the world is threatened with currency collapse and sovereign debt defaults. As such many countries have been developing workarounds to the dollar by way of currency swap agreements.
The intention is not to repeat what we have already stated in previous posts. A quick refresher on some of the information will help as a lead in to the additional information contained within this part.
In part one we were introduced to the 1913 Chinese Gold Reorganization Loan bonds. A final payout on these bonds is indeed in the works and is one part of the overall 2010 Code of Reforms process. Every time a deal was to be finalized with the bonds it corresponded to the debt ceiling debate and Code of Reforms within Congress. They hopscotch each other onward until we find ourselves here today with no resolution on either.
It's important to know that by China honoring the 1913 bonds, they will be able to access their full gold reserves, including the portion that was used to support the 1913 bonds. This is the same gold the Chinese government after the communist revolution denied having. They couldn't now all of a sudden materialize said gold without explaining where it came from, or honoring the bonds which they supported.
With that being said, the bonds will not be honored at their full face value. These bonds will be considered a part of the overall sovereign debt of China and will be integrated within the SDR composition of the renminbi and re-allocated as securities through the BRICS Development Bank.
Like any debt consolidation, all sovereign debt most be included. The owners of the Chinese bonds will get their payout. The payout itself, is based on a flat amount already set for the historical bonds. This amount is specifically valued within the renminbi's SDR composition. The more bond holders that come forward will decrease the individual payout for each bond holder. This is what has been agreed and implementation of the buyback program is simply waiting for the 2010 Code of Reforms to be passed through Congress.
Since most countries have sovereign debt and outstanding historical bonds, it stands to reason that other situations like the Chinese bonds will be handled in a similar fashion.
Another pattern that emerges as we study the history of reserves currencies is that with each reserve currency the centralization has become tighter and tighter. The reserve status of the U.S. dollar has brought this centralization to a whole new level. In simple terms the dollar has exported inflation to other countries. But when we realise that inflation is in fact a mechanism for further centralization the more complete picture comes into focus. Through increased centralization the countries of the world have sunk deeper into sovereign debts from which even more centralization will be offered as the solution.
The SDR solution, with a focus on further centralization, may have been the intended plan back in its inception. Hard to imagine, but perhaps the collective mind of the rent seeking small elitist group of organized special interests has unknowingly pushed forward on this path.
The International Monetary Fund is riding fast and hard on getting these reforms passed through Congress. Even to the point where Christine Lagarde is calling a new multilateral economic system non-negotiable. Sovereign debt restructuring is something the I.M.F. is taking extremely seriously.
Within America the Treasury is in favor of the reforms and is also putting pressure on Congress. The important question to answer here is why is there a division between the Treasury and Congress on the 2010 Code of Reforms? The Treasury is saying yes to the dollar losing its reserve currency status and Congress is saying no. Make no mistake about it, the power the United States has experienced since 1944 and the Bretton Woods Agreements has come from the reserve status of the dollar. After the reforms are passed and the Executive Board restructured, the U.S. will become a regular country like every other country in the world.
This of course will leave a huge void in the geopolitical world which will be filled by a consortium of foreign countries. We can see the anticipation of this opportunity by measuring the military buildup in other regions of the world. Especially in China.
But it's not only geopolitical ramifications. There are profound cultural consequences to America as its stature in world affairs is minimized to that of a regular participating country. It's a humble pie that perhaps some members of Congress, and other industrial and banking interests, are yet prepared to suffer.
Moving forward the potential threats posed by delaying the implementation of the SDR system are real and measurable. The reforms could come too late for effective sovereign debt restructuring. Or the debt restructuring, when finally implemented, could be insufficient to meet the expanding debt contracts under which the economies of the world toil. Banks exposed to debtors could see the confiscation of their assets. We are already seeing this as China has and will continue to purchase banks within the United States.
The rest of the world will not wait for Congress. But it's my prediction that Congress will in fact pass the 2010 Code of Reforms and allow for the restructuring of the I.M.F. Executive Board. Its matter of timing, planned or unplanned. From the moment the reforms are implemented, the dollar will see multiple devaluations staged to coincide with a multi-staged restructuring of the debt.
It's important to mention that with the passage of the reforms, the world will not see an overnight immediate response. The new system will take time to fully integrate. The Global Currency Reset will happen in levels as currencies are allowed to free float within the parameters as set forth by the SDR composition of each country.
As stated previously, this composition will include the following economic fundamentals:
GDP – Self Explanatory
Human Development – Research how China engineered a middle class to fill the empty cities they built over the last ten years.
Ecological Sustainability – Programs through the United Nations make more sense now.
Concentration and Diffusion of Assets – Investigate precious metal price manipulation.
Income – Examples include the growing middle classes of not only China, but also Vietnam and other emerging economies.
Demographics – Immigration and the mass movement of people are directly related to the planning of the new system.
The economic system as it stands today is out of balance and will be corrected by a supra-sovereign reserve currency by way of the SDR mechanism. Between the time the reforms are implemented and the year 2018, the currencies of the world will slowly adjust and fluctuate as their true SDR composition weight settles out.
As another pattern of note, the Basel 3 regulations from the Bank for international Settlements are also set to be fully implemented by 2018. They were originally scheduled to be completed by 2014 but also had to be pushed out because of the delays within Congress in regards to the I.M.F. Code of Reforms. This is not a coincidence.
As we touched on in a previous post, the SDR compositions will be segmented into different regions. Based on what I've learnt and what information is publically available, it is my best estimate that these regions are going to be as follows:
Asia and Pacific Region
Europe
Lower Middle East and Northern Africa
Upper Middle East and Central Asia
Western Hemisphere
Southern Africa
South America
Right now the Ukraine is the hinge between Central Asia and Europe. Syria is the hinge between the Upper and Lower Middle East. The border area between both will become major trade zones with Lebanon regaining much of its past glory.
The hinge between the Western Hemisphere, comprising Canada, Mexico, and the U.S., along with some Central American countries, will find its hinge in the Nicaragua region as the Chinese funded alternative canal project takes form. This new canal through the center of Nicaragua will include two international airports, one at each end, oil and gas pipelines, and a shipping lane almost ten times the length of the Panama Canal. It will take eleven years to complete and is considered the largest construction project in the history of the world.
The SDR compositions themselves will be based on both macro and micro weights and measures. The macro breakdown of each country's currency composition will be as follows:
25% Production Commodities (such as oil, gas, rice, wheat, iron ore, etc"¦)
25% Foreign Reserves and Precious Metals
50% Fiat – Pegged to increase and/or decrease based on the fluctuating values of the above 2 factors.
How the SDR composition system is setup will in essence work as a form of self-limiting rent seeking for the purpose of economic balance between the small elite organized group and the larger worker disorganized group. For a more detailed explanation of rent seeking and what is being proposed here, read the post "What Are Conspiracy Theories?".
It was my intent to also discuss the cultural impact that the New Bretton Woods will have on the world. But I have stretched this post out too long I'm afraid.
In parting, I'd like to close this essay off by saying that every manner of concept and design can be implemented into the world economy. Like the black dot which limited the possibility in the white world of the absolute, all systems will invariably self-corrupt and begin anew the process of centralization or the movement towards decentralization, which is collapse. The world has seen complete decentralization on all levels, both macro and micro, before in the era of the so called dark ages. This came after the gradual collapse of the Roman Empire. There was nothing organized and semi-centralized to take its place. Though there were "pockets of prosperity" sprinkled throughout the world.
What I ultimately propose is a system of balance between micro decentralization and macro centralization. The New Bretton Woods which I have been attempting to describe could be such a system. It's an opportunity for regions and economies of the world to earn a composition value through local energy expenditure and production while safe guarding a new method of energy storage from rent seeking groups. It is my belief that the SDR composition system holds the potential for such energy storage and economic efficiency. We can be more than. – JC Collins
At first there was nothing but an absolute whiteness. It was an endless emptiness of infinite possibility. With a whisper there appeared a single black dot in the middle of the white vastness. The dot was less than – but would become more. The whisper echoed throughout the absolute and the dot smeared outward from both sides becoming a line. The single line filled the void with purpose and direction.
The line eventually duplicated itself followed by the two opposing ends turning inwards and outwards until they touched each other forming a letter "L" shape. The whisper sound returned but louder this time. The "L" shape also duplicated itself with only one of the two turning itself opposite until all four ends of both shapes connected forming a square.
The square sat in the whiteness of the absolute. It was both large and small at the same time. An impossible translucence that was almost solid.
My first thought was one of curiosity as I studied the square. Time was of no relevance so I do not know how long I stared at the shape before it also began to transition into something more than. I watched as the square duplicated itself five times. This made a total of six squares which floated in the absolute. All seemed to change size from small to large before finally positioning themselves into a conjoining shape.
The cube solidified in my mind's eye as I began to differentiate patterns in the sound of the whisper. Some patterns made me feel sad while others brought feelings of security and comfort. As the whisper became a voice, and the voice a language, I felt the cube pull me into its center. There in the center of the cube I waited and watched as other shapes and colors formed outside the cube.
One by one the cube pulled the other shapes into its confined vastness. All the shapes of varying sizes and colors became a blur of motion. The motion also took on patterns which I slowly began to recognize as things of importance. The sensation of heaviness enveloped me.
There was hunger and tears.
Seeking out pleasure I roamed around in my heaviness, grabbing at objects, touching, smelling, and hearing distant sounds of satisfaction. Always one object became another until there was a chorus of material piling up around me. But always the pattern repeated. Endless, back into the infinite possibility from which it came.
In my early years I knew on a deep level that the world was not as it was presented to me by others. Giants walked around inside my world planting seeds from which truth would eventually blossom. But the truth would never come. The giants became smaller and smaller as I grew larger and larger. And the truth seemed to be lost within the geometric shapes that made up the material world around me.
It would take many years for the truth to be extracted from the patterns. And at times the truth would hide itself within false truths and sink back into the patterns. Many would waste valuable time and energy to pull forth false truths while the true truths lay embedded deep within the subconscious of our minds. The greatest true truth of all is the infinite possibility of the absolute just before the black dot materialized.
Like the black dot, fiat currencies are a false truth. Yet they are what we collectively gravitate towards in times of massive centralization. History proves this pattern. So what will it take for the world to back away from the fiat currency and transition to a more stable shape?
In the other parts to this series, we have discussed the 2010 Code of Reforms as agreed upon by the members of the International Monetary Fund. Though the agreements were made, the United States Congress has yet to pass the supporting legislation required to restructure the Executive Board of the I.M.F. The obvious reason for this is that once the reforms are passed and the board restructured the quotas for each country will change and the dollar will be stripped of its reserve currency status.
Congress knows this all too well and is pushing negotiations into dangerous territory as the world is threatened with currency collapse and sovereign debt defaults. As such many countries have been developing workarounds to the dollar by way of currency swap agreements.
The intention is not to repeat what we have already stated in previous posts. A quick refresher on some of the information will help as a lead in to the additional information contained within this part.
In part one we were introduced to the 1913 Chinese Gold Reorganization Loan bonds. A final payout on these bonds is indeed in the works and is one part of the overall 2010 Code of Reforms process. Every time a deal was to be finalized with the bonds it corresponded to the debt ceiling debate and Code of Reforms within Congress. They hopscotch each other onward until we find ourselves here today with no resolution on either.
It's important to know that by China honoring the 1913 bonds, they will be able to access their full gold reserves, including the portion that was used to support the 1913 bonds. This is the same gold the Chinese government after the communist revolution denied having. They couldn't now all of a sudden materialize said gold without explaining where it came from, or honoring the bonds which they supported.
With that being said, the bonds will not be honored at their full face value. These bonds will be considered a part of the overall sovereign debt of China and will be integrated within the SDR composition of the renminbi and re-allocated as securities through the BRICS Development Bank.
Like any debt consolidation, all sovereign debt most be included. The owners of the Chinese bonds will get their payout. The payout itself, is based on a flat amount already set for the historical bonds. This amount is specifically valued within the renminbi's SDR composition. The more bond holders that come forward will decrease the individual payout for each bond holder. This is what has been agreed and implementation of the buyback program is simply waiting for the 2010 Code of Reforms to be passed through Congress.
Since most countries have sovereign debt and outstanding historical bonds, it stands to reason that other situations like the Chinese bonds will be handled in a similar fashion.
Another pattern that emerges as we study the history of reserves currencies is that with each reserve currency the centralization has become tighter and tighter. The reserve status of the U.S. dollar has brought this centralization to a whole new level. In simple terms the dollar has exported inflation to other countries. But when we realise that inflation is in fact a mechanism for further centralization the more complete picture comes into focus. Through increased centralization the countries of the world have sunk deeper into sovereign debts from which even more centralization will be offered as the solution.
The SDR solution, with a focus on further centralization, may have been the intended plan back in its inception. Hard to imagine, but perhaps the collective mind of the rent seeking small elitist group of organized special interests has unknowingly pushed forward on this path.
The International Monetary Fund is riding fast and hard on getting these reforms passed through Congress. Even to the point where Christine Lagarde is calling a new multilateral economic system non-negotiable. Sovereign debt restructuring is something the I.M.F. is taking extremely seriously.
Within America the Treasury is in favor of the reforms and is also putting pressure on Congress. The important question to answer here is why is there a division between the Treasury and Congress on the 2010 Code of Reforms? The Treasury is saying yes to the dollar losing its reserve currency status and Congress is saying no. Make no mistake about it, the power the United States has experienced since 1944 and the Bretton Woods Agreements has come from the reserve status of the dollar. After the reforms are passed and the Executive Board restructured, the U.S. will become a regular country like every other country in the world.
This of course will leave a huge void in the geopolitical world which will be filled by a consortium of foreign countries. We can see the anticipation of this opportunity by measuring the military buildup in other regions of the world. Especially in China.
But it's not only geopolitical ramifications. There are profound cultural consequences to America as its stature in world affairs is minimized to that of a regular participating country. It's a humble pie that perhaps some members of Congress, and other industrial and banking interests, are yet prepared to suffer.
Moving forward the potential threats posed by delaying the implementation of the SDR system are real and measurable. The reforms could come too late for effective sovereign debt restructuring. Or the debt restructuring, when finally implemented, could be insufficient to meet the expanding debt contracts under which the economies of the world toil. Banks exposed to debtors could see the confiscation of their assets. We are already seeing this as China has and will continue to purchase banks within the United States.
The rest of the world will not wait for Congress. But it's my prediction that Congress will in fact pass the 2010 Code of Reforms and allow for the restructuring of the I.M.F. Executive Board. Its matter of timing, planned or unplanned. From the moment the reforms are implemented, the dollar will see multiple devaluations staged to coincide with a multi-staged restructuring of the debt.
It's important to mention that with the passage of the reforms, the world will not see an overnight immediate response. The new system will take time to fully integrate. The Global Currency Reset will happen in levels as currencies are allowed to free float within the parameters as set forth by the SDR composition of each country.
As stated previously, this composition will include the following economic fundamentals:
GDP – Self Explanatory
Human Development – Research how China engineered a middle class to fill the empty cities they built over the last ten years.
Ecological Sustainability – Programs through the United Nations make more sense now.
Concentration and Diffusion of Assets – Investigate precious metal price manipulation.
Income – Examples include the growing middle classes of not only China, but also Vietnam and other emerging economies.
Demographics – Immigration and the mass movement of people are directly related to the planning of the new system.
The economic system as it stands today is out of balance and will be corrected by a supra-sovereign reserve currency by way of the SDR mechanism. Between the time the reforms are implemented and the year 2018, the currencies of the world will slowly adjust and fluctuate as their true SDR composition weight settles out.
As another pattern of note, the Basel 3 regulations from the Bank for international Settlements are also set to be fully implemented by 2018. They were originally scheduled to be completed by 2014 but also had to be pushed out because of the delays within Congress in regards to the I.M.F. Code of Reforms. This is not a coincidence.
As we touched on in a previous post, the SDR compositions will be segmented into different regions. Based on what I've learnt and what information is publically available, it is my best estimate that these regions are going to be as follows:
Asia and Pacific Region
Europe
Lower Middle East and Northern Africa
Upper Middle East and Central Asia
Western Hemisphere
Southern Africa
South America
Right now the Ukraine is the hinge between Central Asia and Europe. Syria is the hinge between the Upper and Lower Middle East. The border area between both will become major trade zones with Lebanon regaining much of its past glory.
The hinge between the Western Hemisphere, comprising Canada, Mexico, and the U.S., along with some Central American countries, will find its hinge in the Nicaragua region as the Chinese funded alternative canal project takes form. This new canal through the center of Nicaragua will include two international airports, one at each end, oil and gas pipelines, and a shipping lane almost ten times the length of the Panama Canal. It will take eleven years to complete and is considered the largest construction project in the history of the world.
The SDR compositions themselves will be based on both macro and micro weights and measures. The macro breakdown of each country's currency composition will be as follows:
25% Production Commodities (such as oil, gas, rice, wheat, iron ore, etc"¦)
25% Foreign Reserves and Precious Metals
50% Fiat – Pegged to increase and/or decrease based on the fluctuating values of the above 2 factors.
How the SDR composition system is setup will in essence work as a form of self-limiting rent seeking for the purpose of economic balance between the small elite organized group and the larger worker disorganized group. For a more detailed explanation of rent seeking and what is being proposed here, read the post "What Are Conspiracy Theories?".
It was my intent to also discuss the cultural impact that the New Bretton Woods will have on the world. But I have stretched this post out too long I'm afraid.
In parting, I'd like to close this essay off by saying that every manner of concept and design can be implemented into the world economy. Like the black dot which limited the possibility in the white world of the absolute, all systems will invariably self-corrupt and begin anew the process of centralization or the movement towards decentralization, which is collapse. The world has seen complete decentralization on all levels, both macro and micro, before in the era of the so called dark ages. This came after the gradual collapse of the Roman Empire. There was nothing organized and semi-centralized to take its place. Though there were "pockets of prosperity" sprinkled throughout the world.
What I ultimately propose is a system of balance between micro decentralization and macro centralization. The New Bretton Woods which I have been attempting to describe could be such a system. It's an opportunity for regions and economies of the world to earn a composition value through local energy expenditure and production while safe guarding a new method of energy storage from rent seeking groups. It is my belief that the SDR composition system holds the potential for such energy storage and economic efficiency. We can be more than. – JC Collins
amoy
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Read more: /India-Brazil-and-S-Africa-support-Argentinas-desire-to-join-BRICS-[/B]3978/]India, Brazil and S Africa support Argentina's desire to join BRICS - News - Politics - The Voice of Russia: News, Breaking news, Politics, Economics, Business, Russia, International current events, Expert opinion, podcasts, Video
Three of the five BRICS countries (Brazil, Russia, India, China and South Africa) support Argentina's plans to join BRICS, Indian ambassador in Buenos Aires Amarenda Khatua said on Monday.
India, Brazil and South Africa are interested in having Argentina join the BRICS group of emerging economies, the ambassador said in an interview with Clarin.
Argentina may have difficulty joining the group as it has sovereign debt problems which the BRICS countries don't have, Clarin points out.
Despite those problems "there is a growing consensus to have Argentina" join in, the diplomat said.
He said he was working to arrange a visit to Argentina for India's next Prime Minister after the BRICS summit in Fortaleza, Brazil, scheduled for July 15.
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This news is baffling. There're better candidates such as Iran, Indonesia or Turkey IMO more qualified for shaping a multipolar world.
Three of the five BRICS countries (Brazil, Russia, India, China and South Africa) support Argentina's plans to join BRICS, Indian ambassador in Buenos Aires Amarenda Khatua said on Monday.
India, Brazil and South Africa are interested in having Argentina join the BRICS group of emerging economies, the ambassador said in an interview with Clarin.
Argentina may have difficulty joining the group as it has sovereign debt problems which the BRICS countries don't have, Clarin points out.
Despite those problems "there is a growing consensus to have Argentina" join in, the diplomat said.
He said he was working to arrange a visit to Argentina for India's next Prime Minister after the BRICS summit in Fortaleza, Brazil, scheduled for July 15.
========================
This news is baffling. There're better candidates such as Iran, Indonesia or Turkey IMO more qualified for shaping a multipolar world.
pmaitra
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I think Argentina should be allowed an observer status for the time being, but should be welcomed in principle. Anyone showing enthusiasm in BRICS, should be encouraged to join as an observer, and I am sure Argentina would understand that it is their sovereign debt that is keeping them from being a full fledged member. BRICS' economic clout should not be diluted.
Anyone has any idea how Argentina could be gradually amalgamated into BRICS, without it becoming an Achilles Heel?
Anyone has any idea how Argentina could be gradually amalgamated into BRICS, without it becoming an Achilles Heel?
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EXCLUSIVE - BRICS emerging nations close to launching bank; to start lending in 2016
(Reuters) - The five BRICS nations will likely agree to fund their $100 billion development effort equally, giving them the same rights in a new multilateral bank that could start lending in two years, a senior Brazilian government official told Reuters on Thursday.
....
"The majority wants an equal sharing of the capital and there is no other specific proposal on the table," said the official, who is directly involved in the negotiations. "This is not going to be a problem."
EXCLUSIVE - BRICS emerging nations close to launching bank; to start lending in 2016 | Reuters
(Reuters) - The five BRICS nations will likely agree to fund their $100 billion development effort equally, giving them the same rights in a new multilateral bank that could start lending in two years, a senior Brazilian government official told Reuters on Thursday.
....
"The majority wants an equal sharing of the capital and there is no other specific proposal on the table," said the official, who is directly involved in the negotiations. "This is not going to be a problem."
EXCLUSIVE - BRICS emerging nations close to launching bank; to start lending in 2016 | Reuters
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I do not have much expertise on this matter but thinking aloud.
1) The idea of any such international bank is to provide insurance if there is a downside for one of the member countries. Given there are just 5 countries joining it, whose business cycles can be highly correlated, I do not know how much of a cushion this bank can provide.
2) Another important role for any such bank is to facilitate international transactions. Individually speaking none of the currencies of BRICS nations stand against the dollar. 1) Russia is flexing its muscles right now and even otherwise not super stable country. 2) China is also running out of steam(also, does other BRICS nations trust Chinese?) 3) Forget about the other three countries as their economies are in doldrums.
So, at max these countries can transact with each other using their local currency with some sort of guarantee provided by bank. I do not know how big the trade volumes are between BRICS nations(not too much). Also, the main question is whether a firm with international exposure prefer to hedge its transactions using a BRICS currency or $? I would think in present conditions it would be $. Are BRICS countries ready for some sort of agreement on currency volatility? I think this would be the first step to make it a serious contender to IMF.
But we need to begin somewhere, so probably in 2-3 decades time with India and China having overtaken US as the biggest economy, this bank would fulfill its role.
1) The idea of any such international bank is to provide insurance if there is a downside for one of the member countries. Given there are just 5 countries joining it, whose business cycles can be highly correlated, I do not know how much of a cushion this bank can provide.
2) Another important role for any such bank is to facilitate international transactions. Individually speaking none of the currencies of BRICS nations stand against the dollar. 1) Russia is flexing its muscles right now and even otherwise not super stable country. 2) China is also running out of steam(also, does other BRICS nations trust Chinese?) 3) Forget about the other three countries as their economies are in doldrums.
So, at max these countries can transact with each other using their local currency with some sort of guarantee provided by bank. I do not know how big the trade volumes are between BRICS nations(not too much). Also, the main question is whether a firm with international exposure prefer to hedge its transactions using a BRICS currency or $? I would think in present conditions it would be $. Are BRICS countries ready for some sort of agreement on currency volatility? I think this would be the first step to make it a serious contender to IMF.
But we need to begin somewhere, so probably in 2-3 decades time with India and China having overtaken US as the biggest economy, this bank would fulfill its role.
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LETHALFORCE
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Have Argentina back their share with gold and silver holdings?
