Tag Archives: BRICS

Wave Good-Bye To The Dollar’s Reserve Status

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“Paper Money Eventually Returns To Its Intrinsic Value – Zero” – Voltaire

Set aside all other financial, economic and political concerns continuously shoved in our collective faces by the mainstream media.  It’s a distraction – to a large degree intentional.

These are the ONLY events that matter right now:    this, “China Begins To Reset The World’s Currency System,” and this,   “Venezuela Is About to Ditch the Dollar in Major Blow to US: Here’s Why It Matters.”

Once the dollar is no longer regarded or used as the reserve currency, third-world poverty will engulf everyone in this country below the upper half percent wealth stratum…except those who possess a fair amount of physical bullion.  I just bought more gold and silver coins from a friend yesterday who had an uncontrollable urge to get their house painted and needed to sell some to me to fund it.  It won’t matter what the house looks like in a couple years but they would never take my word on that.

The level of assumed entitlement in this country by the middle class is absurd…

All the money and all the banks in Christendom cannot control credit…Money is gold and nothing else – JP Morgan’s 1912 Congressional testimony on “the justification of Wall Street”

Trump has suggested permanently removing the Treasury debt-ceiling. The Treasury debt-ceiling is the last remaining barrier to the ability of the Fed and the Government to create an infinite amount of fiat currency.  Debt that is issued behaves exactly like printed currency until that debt is repaid.  The non-repayment and continued issuance of the amount of debt outstanding is the critical point to understanding this concept.  Since the early 1970’s, the Treasury debt outstanding has grown continuously.

Printed Treasury certificates created in this manner behave no differently than printed currency. This is a reality that economists completely ignore.  Most analysts who think they understand monetary economics look upon this concept with disdain. The continuous issuance of an increasing amount of credit of any type is no different that outright currency printing (until the amount of outstanding credit is paid off, which it never has been since the demise of Bretton Woods in 1971).

Removing the debt-ceiling gives the U.S. Government, in conjunction with the Fed, the power to print an unlimited amount of Treasury notes. Historically, a large portion of these notes have been funded with recycled petro-dollars. The “QE” implemented by the Fed funded $2.5 trillion of the Treasury issuance.  I don’t know where the funding for the next round will come from unless the Fed prints a lot more money.  I suspect it will. The price of gold (and silver) spiked-up on Friday in correlation with the announcement of Trump’s proposal.  That’s your warning shot…

Fake News And Real Money

Financial Markets, Gold, Housing Market, Market Manipulation, Precious Metals, U.S. Economy, , ,

But the most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly and with unflagging attention. It must confine itself to a few points and repeat them over and over. Here, as so often in this world, persistence is the first and most important requirement for success. – Adolf Hitler

Propaganda, also known as “fake news,” has become the norm in mainstream media reporting. Somehow the idea of Russia hacking the DNC computers morphed into the generic, “Russia hacked the election.” Per Hitler’s formula, Hillary Clinton introduced the idea during one of the presidential debates and kept repeating it until the press seized it and ran all the way with to the end zone with “Trump is a Russian ally.” Now Congress is pre-occupied with the fraudulent charge that Russia is controlling U.S. politics. The whole spectacle is beyond idiotic.

In a similar manner, the reporting of economic statistics has become another tool of propaganda. The Government, as we all well know by now, spits out economic reports based on shoddy statistical samples that are seasonally adjusted. Then the data that is cooked for any specific month is annualized. While the result might not be too far off base for any specific month, the errors aggregate over time so that some statistics, like the GDP report, bear no resemblance to reality.

A great example of using propaganda to promote an idea is the continuous mantra coming from the National Association of Realtors that “low inventory” is hampering home sales. It’s an effective device to make the public think that a lack of homes for sale is the explanation for declining sales. It’s also a lie. Homebuilders are sitting on a record level of inventory. Flippers and investors bought 37% of all existing homes that traded in 2016. Many are sitting on homes they can’t sell for enough to cover their rehab expenses. The over $750,000 segment of the market is flooded with inventory.

The truth is that, if you examine the historical data in order to question the NAR’s assertions, the facts show that since 1999 – which is when the Fed began tracking existing home sales – relative inventory levels do not drive home sales:

In fact – if anything – there is an inverse correlation between inventory levels and home sales. In other words, since 1999, homes sales rise when inventories are low!

Thus propaganda is a tool used to manage public perception.  Unfortunately, a high percentage of the population only consumes headlines and sound-bytes.  It’s the perfect set-up for politicians to employ Hitler’s advice on administering propaganda.  The commonly accepted idea is, in fact, the opposite of the truth.

The commandeering of a country by elitists begins by eliminating real money and replacing it with a fraudulent fiat currency.  But the eastern hemisphere is moving in an opposite direction as the west.  As reproduced in The Daily Coin, Russia and China have quietly struck an agreement laying the groundwork to replace the U.S. dollar’s reserve status with a gold-backed currency system:   Moscow and Beijing join forces to bypass US dollar in world money market.    In today’s episode of the Shadow of Truth we discuss the decline of the United States and the advancement of the new superpower bloc emerging in the east.

Time Is Running Out For The U.S. Dollar

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Get ready for ground shattering geopolitical changes. At the crossroads of Asia and Europe, it has been decided that the Russian city of Ufa will be the point of convergence for all the initiatives and projects of the Silk World Order of trade and integration that China and Russia are spearheading. Ufa, which is the capital of Russia’s Bashkortostan, is being used to simultaneously host an extraordinary summit for both the BRICS—which has increasing become an alternative forum to that of the G7—and the Shanghai Cooperation Organization (SCO) respectively from July 8 to 9 and from July 9 to 10, 2015.  – The US Dollar/Bretton Woods Are Finished

As many of you know, China has been methodically arranging currency swap structures which enable it to trade bilaterally with trading partners in each country’s respective currency, thereby entirely by-passing the use of the U.S. dollar in trade transactions.

Furthermore, it has become apparent to anyone who is exposed to real news – as opposed to western mainstream propaganda – and has the ability to rub two brain cells together that China, Russia, et al have been systematically setting up financial and geopolitical institutions –  the BRICS bank, the Shanghai Cooperation Organization and the Asia Infrastructure Investment Bank –  which enable the members to conduct their affairs completely divorced from any U.S. hegemonic political and economic influence.  Our clue that these institutions were going to dismember the U.S. global octopus tentacles was when the U.S. openly discouraged certain western ally countries from joining the AIIB.

Gone are the days of unchallenged US domination. The architecture of the post-Second World War or post-1945 global order is now in its death bed and finished. With or without Washington, a Silk World is emerging and its coming is being trumpeted from Ufa as the SCO strengthens and the BRICS institutionalizes itself as the cornerstone of a new multi-polar world order.  – from the link at the top

Russia hosted an international summit this past week in its capacity as the chairman of both BRICS and the SCO.  As the author of the above-linked article from Global Research describes, the summit as an amalgamation of the BRICS, SCO and the EEU (Eurasian Economic Union in order to begin mapping out a new “Silk World Order” which will replace the Bretton Woods Treaty and the world order as governed by the U.S.-dominated IMF and World Banks.

This a fascinating analysis of what transpired at this summit and well worth reading:  The US Dollar and Bretton Woods are Finished: The BRICS/SCO Summits in Ufa Mark the Start of a “Silk World Order.”

VII-Summit

Russia And Saudi Arabia Sign Six Deals, Agree To A Petroleum Alliance

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Notable reader comment:   With the petro – dollar as good as lost It’s only a matter of time, rather sooner than later, to realize that the dollar is in fact a walking dead in mid to short-term prospect. The world faces grim paths to follow: one implying US triggering a nuke carnage or Financial Mother Nature striking first with a full scale financial collapse to bring down dollar before the US starts the massacre.

It’s becoming increasingly clear that most of the developed world is becoming fatigued from the thoroughly corrupt United States.  The latest hallmark of this is the series of economic and political agreements between Russia and Saudi Arabia, the number 1 and number 2 largest oil producers in the world.  27% of the worlds oil supply is produced between the two countries.

Russia and Saudi Arabia signed six new cooperation deals last Thursday in an event that signifies a reversal of Saudi Arabia’s relationship with Russia under its new king.  The six new cooperation agreements will advance the relationship between the two countries in all areas of commerce and included the areas of  military and nuclear activities.

Perhaps most significant was statement from Saudi Arabia’s oil minister, Ali al-Naimi, who issued a statement about advancing the cooperation between Saudi Arabia and Russia in the oil market:

This, in turn, will lead to creating a petroleum alliance between the two countries for the benefit of the international oil market as well as producing countries and stabilizing and improving the market.

This is highly significant because Naimi is considered to be the second most powerful person in Saudi Arabia next to the King.  In my opinion, the advancement of the relationship between Russia and Saudi Arabia further isolates the United States from the rest of the world outside of Europe.  More important, it delivers another blow to the petro-dollar.

You can read the rest of this news report here:  Russia/Saudi Arabia Ink Six New Deals

While the U.S. “fiddles” militarily all over the globe, wasting trillions on the its mythological “war on terror” in an effort to maintain a grip on its world superpower status, the rest of the developed world is working on re-setting the global “chess board.”  The cornestone of this strategy involved moving away from the U.S. dollar’s reserve status.  I just hope the world can figure out how to remove the fuse from the United States’ nuclear capabilities…

Putin: More Members To Join BRICS Bank

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BRICS are coordinating their policies on key international issues ever more closely, and are playing an active part in shaping a multi-polar world order and developing modern models for the world’s financial and trading systems.  –  Putin, The BRICS Post

Vladimir Putin assumed the annual Presidency of the BRICS last Wednesday and Shanghai will be the host city for the BRICS headquarters.  The BRICS bank will formally be named the New Development Bank and it is anticipated that the other countries will be joining the BRICS bloc in the near future.

It has been my view that the BRICS bank has been been established as an alternative source of financing to the IMF, which is heavily controlled by the United States.  I also think the BRICS banks will serve as a “flushing mechanism” through which China and Russia will redistribute a portion of their U.S. Treasury holdings.   This would be a less conspicuous avenue for selling U.S. Ponzi paper than outright selling through traditional bond market mechanisms.

We are watching history in the making right now.  The global balance of economic and political power is shifting from west to east.   I believe this process is starting to accelerate. Unfortunately, I also believe it makes the U.S. a more dangerous as military threat to the entire world.   History has shown us repetitively how this cycle ends.   The biggest difference between history and now is that the U.S. alone possesses enough fire power to incinerate the surface of the earth.

Unfortunately, unless something can be done to stop the insane neocons who have captured control of the key areas deep inside the U.S. Government, this world is headed for “The Road.”

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

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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…