Tag Archives: IMF SDR

Thoughts On Rate Hikes, Money Printing and Jim Rickards

In times of universal deceit, telling the truth is revolutionary act.  – George Orwell

A subscriber to my Mining Stock Journal sent me this correspondence a few days ago while the precious metals were being pushed lower by the bullion banks:

I read an article before the July 4th holiday from James Richards. He said that China would use the G20 meeting to push for the SDR. I kept this in the back of my head while the PMs were being smacked around in August. Zerohedge came out with this story today that more fiscal stimulus was coming:  LINK

There’s no question that Fed co-chairman Stanley Fisher floated his “rate hike coming” propaganda all week last week, starting with his useless speech at Jackson Hole, as a device to help the Comex banks smack gold with their fraudulent paper gold.

It’s now clear that gold was taken down ahead of the G20 meeting because the insiders knew that a call for more QE would emerge.  And that’s about the only thing that emerged other than the amusing abuse of Obama by China and Russia.

This was my response to the above subscriber inquiry – I thought it was worth sharing:

Rickards is controlled opposition. He appears to be friendly to anti-elitists like our crowd but he’s a front for the Deep State that is pushing hard for the SDR to replace the dollar because the dollar will still be largest component and it will enable the Deep State to maintain a high degree of control of the global economic system.

I believe China/Russia are using the SDR as an intermediate step toward getting rid of the dollar completely. That the SDR will play some type of role for awhile is already priced in to the market. That Chinese SDR bond issued is an example. Rickards is regurgitating information that is already obvious and absorbed into the markets. More interesting is to figure out what’s next.

You saw how China treated Obama at the G20 vs. Putin. The writing is on the wall on the for the dollar and the U.S.

If the big Central Banks resort to more QE to keep everything from collapsing, gold will soar. If they don’t resort to QE, everything will collapse and gold will soar in flight to safety.

The only strategy “they” have left is to create as much disinformation and confusion as possible. Rickards is part of that disinformation apparatus. Note the heavy onslaught of anti-gold propaganda the past few weeks, primarily Fed heads chirping like pre-programmed monkeys about rate hikes. Won’t happen.

Where Is The IMF’s Gold?

In mid-2009, the IMF announced that it was going to sell a portion of its gold.  It ended up selling 403 tonnes of its then-reported 3218 tonnes of gold.  Back then the original announcement made it sound like the IMF was trying to push down the price of gold with a big sale announcement, as the price of gold went parabolic after the 2008 de facto collapse of the financial system.   The excuse for the gold sale was to “shore up” IMF finances.  However, historically, the IMF has sold off portions of its gold holdings as a policy to reduce gold’s role in the global fiat currency system.

At the time, India and China jointly delivered a research paper which suggested that, if the IMF were interested, the two countries would be interested in buying all of the IMF’s gold. The IMF limited its sale to the 403 tonnes:   200 tonnes to India, 2 tonnes to Mauritius and 10 tonnes to Sri Lanka.  By  December 2010 the IMF concluded the sale of the balance of the gold without ever disclosing the buyers.

The IMF’s gold comes primarily from the member countries, who pledge gold to the IMF as part of the cost of their “quota” assigned to become a member country.  25% of a country’s “quota” were to be paid in gold.  The IMF states that its gold is held in various depositories, like the NY Fed, around the world.  The truth is that most of the gold “pledged” to the IMF has likely been leased out by the custodial Central Banks.

Curiously, over the IMF’s 71 year history, it sold its gold intermittently.  Each time the demand by Central Banks to buy that gold has far exceeded the amount of gold offered.  This is an important point to note because it drives home the point that gold is significantly undervalued and that real Central Bank demand emerges when large quantities (100’s of tonnes) of gold are offered for sale.

In the latest episode of the Shadow of Truth, we discuss the interesting shift occurring in the IMF’s SDR structure and what it means for the U.S. dollar as a reserve currency.  We also discuss why the price of gold will likely begin to move much higher as we move from summer into autumn – we also discuss why GLD is a total fraud:

De-Dollarization is Now Assured – SDR Bonds Have Been Approved

At Rory’s prescient behest, we have been way out in front of the curve on the Silk Road and on the issue of China using the IMF to push aside the dollar as the reserve currency. Casey Research finally caught up with their own Silk Road piece – more than a year after the Shadow of Truth was chatting about it.

Rory’s Daily Coin has been all over the restructuring of the IMF’s SDR, something on which the mainstream and alternative media has been conspicuously silent. As Rory reports below, the IMF has approved China’s issuance of an SDR-denominated sovereign bond issue:

This is a major first step in delivering a realistic blow to the dominance of the U.S. dollar as world reserve currency. It is no secret that China has been making international moves to make the Renminbi (RMB) a more attractive currency on the global stage. This latest move solidifies the RMB as a world currency.

You can read the rest of Rory’s analysis here plus I suspect we’ll chat about this in tomorrow’s episode of the Shadow of Truth plus we are going to rant about something that is on everyone’s mind: NBC’s abortionist coverage of the Olympics: Global De-dollarization Is Now Assured.

I Have Good Company With My View That Rickards Is Full Of B.S.

All this says to me that people who are perceived as being credible keep circulating these absolutely preposterous myths. But if people want to believe the fairly tale that the United States still has all its gold safely vaulted in places like New York and Fort Knox, they are telling you that this is how all this synthetic gold has in fact been created.

That quote and the one below is from Hong Kong-based fund manager, William Kaye on King World News (LINK).

The U.S. government is essentially communicating to people through its agents that we still have all that gold in our vaults and to prove it, here is the serial number.  So, if necessary, just show up with this piece of paper and we will deliver the gold.

I have said all along that Rickards is a front for the Government and is trying to sell the idea of using the IMF SDR to the world as a reserve currency replacement for the dollar.   In other words, the elitist insiders high up in Government know that the dollar’s days are numbered.   But the dollar is by far the highest percentage component of the SDR  (42%). This remedy would extend the ability of the U.S. to kick  the can of its economic demise down the road.  Too bad for the U.S. that the IMF SDR will not be the dollar replacement.

My Easy Trade idea is still valid.  It’s bounced nicely from its low on Friday and we’ve made a nice gain in the fund from taking delivery of the stock from the puts I shorted Friday morning.  For anyone who buys the report, I will still offer free options trading advice/strategies if you email me after you’ve read the report:   Easy Trade Idea.

 

This Is Why I Believe Rickards Is Wrong About The IMF SDR

James Rickards has been quite vocal in his view that the price of gold is headed much higher.  Yet, in the same breath he aggressively promotes the  idea of using the IMF SDR to replace the dollar as the world’s reserve currency.

There’s two reasons for this.  First, if you study Rickard’s background going all the way back to his role in the Iran hostage crisis, you’ll see that he’s been lifetime “front man” for the most powerful interest groups that control this country behind the scenes.  First and foremost he’s a front-man for the Pentagon.

I’ve been told separately, independently from two different sources that the elite insiders in the Department of Defense know that the demise of the dollar is inevitable.   That there’s nothing that can be done to prevent it.

Which brings us to the second reason that Rickards is trying to pimp the IMF SDR like a magic elixir snake-oil salesman.  The U.S. dollar currently represents 61.2% of the IMF SDR:   SDR Currency Basket.

If the U.S. Government can persuade the world to accept the IMF SDR as a replacement for  the dollar, the U.S. Government will still have de facto control over the world’s reserve currency and therefore can continue to defer the systemic collapse of the U.S. into the future.   Please note the absence of Chinese yuan or Russian rubles from the IMF SDR basket.

I have always believed that China and Russia would never accept an IMF SDR as the global reserve currency, even if the U.S. and EU were willing to put those two respective currencies in the basket.  The biggest clue for me has been the rate at which both China and Russia are accumulating gold in their currency reserve accounts and working to eliminate the use of the dollar in their trade agreements.

But this article, reinforces my view – BRICS To Form Their Own “IMF:”

The BRICS nations — Brazil, Russia, India, China and South Africa — are reportedly close to finalizing their long-awaited development bank and currency reserve, each valued at $100 billion, in what has been billed as a historic challenge by the world’s emerging economies to a global financial architecture that has been dominated by the U.S. and Western Europe since its post–World War II inception.

The BRICS nations first announced their plans for the bank in March 2013 but struggled to reach an agreement over China’s desire to hold a greater stake in the institution. But a Brazilian government official told Reuters last week that the five members were ready to split funding and control equally, clearing the last major hurdle for a launch in 2016.

To economists in the developing world, who have long criticized the World Bank and IMF as anathema to the countries they purport to help, the New Development Bank holds tremendous promise. Critics say the West has taken advantage of its monopoly in international lending to wield outsize influence in the economic and political affairs of developing countries, dictating development models that further entrench these countries’ subservience to the West.

But unlike the U.S. and Europe, who are in lockstep on most things, the BRICS countries have little in common but a shared ambition to rebalance the global economic order.

I would suggest that anyone who wants to see the issues clearly should place a little less “faith” in the information being disseminated by people like Jim Rickards.  I would also suggest that the  unwillingness of Russia/China to cooperate with the U.S. on the matter of the U.S. dollar is the reason recent military aggression by the U.S. toward Russia and China…