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I like the Sovereign Man a lot, but I think he isn't giving enough thought to the sheer quantity of dollars out in circulation and logged on accounts across the globe. china would have to do nothing but print money and dump it in to circulation to accomplish what has taken us since 1913 to do.

That said, it is correct to presume the immediate damage to the dollar "brand" if other nations drop the dollar and simply trade in yuan instead. That would indeed be disastrous. Perhaps I'm taking too simplistic a view from t eh cheap seats, but that's how I see it [at least until i am corrected].

I would actually appreciate it if someone [DDMB?] knows a better way to explain this.
 
Anything related to the dollar's role as a reserve currency (or trends leading to a future where that is no longer the case) fits in this thread.

On the other side of the world today, a couple of gentlemen that few people have ever heard of signed an agreement that has massive consequences for the global financial system.

It was a Memorandum of Understanding signed by representatives of the Singapore Exchange and Hong Kong Exchange. Their aim– to combine their forces in rolling out more financial products denominated in Chinese renminbi.

This is huge.

Hong Kong and Singapore are THE two dominant financial centers in Asia. For years they’ve been locked in competition with one another, much like New York and London. So their public partnership is a very big deal… indicative of the clear objective they have in front of them.
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Ancona - by itself, this news isn't game changing. It's just another keystone in the foundation China is building.
 
Dec. 1:
Dubai: Four Gulf Cooperation Council (GCC) countries will announce the introduction of a common currency by the end of December, a Bahraini daily reported on Sunday.

The common currency to be announced by Bahrain, Kuwait, Qatar and Saudi Arabia will be pegged to the dollar, a source told Akhbar Al Khaleej.

“The decision to peg the Gulf currency to the dollar is political and is not related to the economy,” the source said.

“From an economic point of view, it would have been better to peg the new currency to a basket of currencies because the volume of trade of the Gulf states with the countries of the European Union is much larger than that of their commerce with the United States. Gulf exports of oil to the European Union are estimated to constitute about 70 per cent of European imports,” the source said.

The daily did not identify the sources, but said it was close to Gulf decision-making circles.

Oman and the UAE, the other two members of the six-country Gulf council set up in 1981, are not likely to join the common currency in the near future, the source added, without divulging the reasons for the same.
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More: http://gulfnews.com/business/econom...nce-common-currency-by-end-december-1.1262037

Dec. 4:
The Gulf Monetary Council has denied media reports concerning the finalisation of the launch of a single currency for the Gulf countries.

Earlier this week, media reports claimed that four GCC countries will announce a common currency by the end of this year. The currency would reportedly be pegged to the dollar, the report said without revealing its sources.

However the Gulf Monetary Council has dismissed the rumours.

“The Monetary Council affirms that the reports by some newspapers and websites over the date of the issuing of the single Gulf currency are completely false, not based on accurate information nor reliable sources,” the council said in a statement published by Kuwait News Agency.

The Monetary Council is mandated with placing regulations for the establishment of the Gulf Central Bank and completing the establishment of the Monetary Union.
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More: http://gulfbusiness.com/2013/12/officials-deny-common-gulf-currency-launch/

???
 
I'm quite sure the ruling families are enthralled with how it concentrates power in the hands of a few.
 
...

Yes, PMBug, the concentration of power in Europe implies that the RICH families there are benefiting enormously. Yet, the countries of Greece, Spain and Italy (and I have seen what has happened to Italy over the past 15 years or so) are suffering...

I believe that we see much the same here in the USA. The very rich are getting richer, but the Middle Class is in peril, real peril. Even the "Upper Middle Class", what at least some of us are in is in peril.

***

At this point it is hard for me to see opportunities for "growth". There is industrial overcapacity and debt worldwide. Workforce participation is down here in the US, while Europe has very high unemployment especially among the young (and, more ominously, among young immigrants).

Oil & gas production will be key here, yes, the Bakken and Eagle Ford Shales have boosted US oil production, but how long will that last (I don't know)? If energy starts getting VERY expensive, then that will be "all she wrote"... There appears to be no increased demand for cars or even bearings in the world. No increased demand, yet inflation. Hmm. Maybe the DECREASE in credit explains our plight, maybe the opposite of "stagflation" (our collapsing debt fighting inflating money supply)...

Gold miners have been hit hard by inflation (in input prices), also, lower grades, I do not see those burdens on the miners abating, so I am sticking with the metals. Gold not miners. FOFOA has beaten the drum on that since I first ran into him in 2009. FOFOA has a new piece up, and it is excellent, he nicely summarizes his perspective, very approachable article, but, uh, kind of long (smile,,,,):

fofoa.blogspot.com
 
...

A quick follow-up on Europe.

An Italian lady is in town visiting her daughter's family for the next 5 weeks or so, my wife has become good friends with her (my wife has studied Italian on and off for 15 years, she LOVES languages, especially Italian). "Rosarita" (14th of 14 children!) was over this evening visiting us.

I asked her what is going on in Italy, as I have not read much about Italy, even at Zero Hedge. She said that things really are terrible there (she is at least kind-of wealthy). And getting worse...

And that the Chinese are now moving in and buying properties in Tuscany, vineyards, "trophy properties", etc. And the Italians are not real happy about that...
 
The bail-in will wipe out what remains of Middle Americas wealth. Obama will have what he was wishing for; a population completely and irretrievable dependent upon the state.

Thanks Obama!
 
On a brighter note, unintended consequences can usually be relied upon .....

We might even do better if we do not have to rely on state money
 
If we got rid of all subsidies, corporate as well as private;

Got completely out of every country on earth except our own;

Re-instated tariffs on all imports equal to the difference in price between the imported product and an identical product produced domestically;

Repealed Dodd-Frank and re-instated Glass Steagall;

Eliminated all public unions, federal government unions, municipal worker unions, teacher unions and all defined benefit plans that are forced down the throats of citizen taxpayers and are no longer viable;

And,

Eliminated all divisions and departments of Homeland Security except the coast Guard;

Eliminated the NSA, CIA and EPA

Then and only then, would we be able to return to some semblance of sanity and security, both physical and financial.

When I become Emperor, I will do just that.
 
China became the world's largest trading nation in 2013, overtaking the US in what Beijing described as "a landmark milestone" for the country.

China's annual trade in goods passed the $4tn (£2.4tn) mark for the first time last year according to official data, after exports from the world's second largest economy rose 7.9% to $2.21tn and imports rose 7.3% to $1.95tn.

As a result total trade rose 7.6% over the year to $4.16tn. The US is yet to publish its 2013 trade figures, but with trade totalling $3.5tn in the first 11 months of the year, it is unlikely to beat China.

The shift in the trading pecking order reflected China's rising global dominance, despite a slowdown in economic growth last year.

Zheng Yuesheng, a spokesman for China's customs administration, said: "It is very likely that China overtook the US to become the world's largest trading country in goods in 2013 for the first time. This is a landmark milestone for our nation's foreign trade development."
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http://www.theguardian.com/business/2014/jan/10/china-surpasses-us-world-largest-trading-nation
 
News that Switzerland’s central bank recently opened talks with its Chinese counterpart to swap currencies has raised Swiss hopes of attaining a renminbi hub status. But Switzerland is playing catch-up with rivals that share the same ambition.

As global renminbi (RMB) transactions gather pace, a tantalising vision has emerged of a new international reserve currency competing with the dollar, euro and British pound. Financial centres are jostling to enjoy the prestige and profits of becoming RMB conduits.

In December 2012, the Swiss government officially announced its intention of becoming a renminbi hub, joining the likes of Britain, Canada, Germany and France in trying to woo Beijing.
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http://www.swissinfo.ch/eng/business/Swiss_inch_towards_renminbi_hub_dream.html?cid=37639498
 
Recall this from a short while back:
PMBug said:
Behold the nascent rise of the PetroYuan:
The Shanghai Futures Exchange (SHFE) may price its crude oil futures contract in yuan ...
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More: http://www.reuters.com/article/2013/11/21/china-crudeoil-idUSL4N0J62M120131121
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Now this:
...
China continues to not only liberalize and internationalize the gold market there it is tying a new gold ‘spot’ contract to the Yuan. The new Yuan priced gold contract on the Shanghai gold exchange is a step towards a greater use of the Yuan internationally as foreigners who wish to buy this product must sell dollars to buy Yuan so they can buy this gold contract.
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http://www.mineweb.com/mineweb/content/en/mineweb-africa?oid=226026&sn=Detail
 
Relating to the recent reports on the amount of Gold that China imported in 2013:
Koos Jansen said:
...
The crucial SGE rule that makes the withdrawal numbers significant is this: once SGE bars are withdrawn from the vaults they are not allowed to be re-deposited. This rule can be found in the SGE rule book (#23), and, for example, is disclosed on several ICBC webpages regarding gold products.
(2) According to the Shanghai Gold Exchange rules, physical gold taken out of the warehouse cannot be taken into the gold warehouse designated by the Shanghai Gold Exchange again.
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The SGE rule, combined with the Chinese laws that require all imported and mined gold to be sold through the SGE, implies that the withdrawals are equal to total Chinese gold demand. The following quote is from the Chinese media, translated by Soh Tiong Hum:
China's explosion in demand for physical gold in 2013 left a deep impression on international investors. The Shanghai Gold Exchange withdrawals for the year up till 27 December 2013 exceeded 2180 tons. Considering the exchange's position as a hub for domestic gold circulation, in conjunction with a system that forbids withdrawn gold from re-entering inventory, to a large extent the withdrawals number can be treated as the best benchmark for physical gold demand in the Chinese market. Not to mention that the entire 2013 global mined gold production does not exceed 2700 tons. China's massive demand has to a large extent remade the world's gold circulation system. Newly mined and stocked gold is moving through trade links in London – Switzerland – Hong Kong – into China in a large scale orientation towards the East. The impact of China's demand on international gold price will inevitably increase.
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http://www.ingoldwetrust.ch/open-letter-to-cpm-group

Consider this too...
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According to the USGS Gold Mineral Industry Surveys, the United States exported a record 886 mt (gross weight) in 2008. Gold scrap exports declined to 728 mt in 2009 and then stayed basically flat for the next two years at 630 mt and 633 mt respectively.

However, in the past two years, gold scrap exports have declined substantially. Here we can see that in 2012, gold scrap supply declined more than 50% to 266 mt compared to the previous year. And in the first 10 months of 2013, U.S. gold scrap exports have fallen another 50% to only 121 mt.
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http://srsroccoreport.com/is-the-u-s-running-out-of-gold-scrap/is-the-u-s-running-out-of-gold-scrap/

So, gold spot gets smashed and people stop selling their gold jewelry to cash4gold (et. al.). Scrap gold "production"/exports tumble.

Physical gold withdrawals from the SGE are indicative of real gold being imported by China and the number of tons for 2013 is close to the total new global production.

When you consider the gold being coined by national mints (USA, Canada, Australia, UK, etc.) and minted into bars by private mints, it would seem likely that global production isn't covering demand right now. Gives credence to the reports that GLD and COMEX gold is going east.

That's got to be putting pressure on the central banks that are trying to give Germany "it's" gold back, if they indeed don't have unencumbered gold to deliver.
 
...
Epoch Times: Can China supply the world with a reserve currency?
Mr. Rickards: Not with the yuan. A: They don’t want to open their capital account. B: The yuan can’t possibly be a global reserve currency. It is expanding in use as a trade currency, but most people don’t understand the difference between a trade currency and a reserve currency. The trade currency is just a way of keeping score in the balance of payments mechanism.

If you are Brazil and China, and Brazil agrees to take yuan for Brazilian goods, and China agrees to take reals in exchange for Chinese goods, that’s fine. Then you just keep score and settle up every now and then. That’s a trade currency.

But to be a reserve currency means that countries that have reserves have to invest it in something, so you need a deep liquid pool of investable assets. China does not have that. There is no Chinese bond market. There are a few Dim-Sum bonds and a few other things, but there is no Chinese government bond market to speak of, and it would take 10 to 15 years to develop one.

But it’s not just about issuing debt. China doesn’t have to borrow because they have too many reserves. If they don’t borrow then there are no bonds, and if there are no bonds there can’t be a reserve currency because there is nothing to invest in.

Even if they did, there is no rule of law in China, so why would you trust the Chinese not to steal your money? So putting all that together, they are not even close to being a reserve currency.

Epoch Times: So what are the Chinese up to?
Mr. Rickards: What China wants is the SDR [Special Drawing Right, a type of money for governments], because it’s not the dollar. It’s issued by the IMF [International Monetary Fund], and China is simultaneously lobbying for more votes in the IMF.

China is trying to use its willingness to lend money to the IMF to purchase SDR notes from the IMF to give the IMF money to bail out Europe. It’s trying to use that as a lever to get more votes. If it has more votes, it would be comfortable using the SDR as a reserve currency, because its use would be regulated by the membership and that would make China the second largest member after the United States.

The United States is opposing it, but Christine Lagarde [Head of the IMF], is pushing very hard to increase the Chinese role. It’s a complicated global game.

If you said to me, does China want to get rid of the dollar as the global reserve currency, the answer is yes. But most people think it’s that they want the yuan. They don’t. It’s the SDR.
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http://www.theepochtimes.com/n3/514449-james-rickards-china-planning-to-displace-dollar/2/
 
Thank for information..

w1.png
 
The Ukrainian situation is undoubtedly evoking some saber rattling, but this is a seed no one wants to pour miracle grow on:
Russia vows to switch to other currencies over US sanctions threat - Glazyev

Russia can dodge any proposed US sanctions by switching to other currencies and creating its own payment system, Putin’s economic advisor Sergei Glazyev said Tuesday. A senior Kremlin official has denounced Glazyev’s remark on US-Russia economic ties, calling them "a personal opinion" inconsistent with the Kremlin stance.

This comes amid US threats to pile sanctions on Russia over its stand on the Ukrainian coup. US Senate is currently debating possible measures against Moscow.

Senator Christ Murphy, the chairman of the Senate's Europe subcommittee, said lawmakers were considering such options as imposing sanctions on Russia's banks and freezing assets of Russian public institutions and private investors.

Sergei Glazyev told reporters today Russia would have to switch to other currencies to curb its dependence on the United States.
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More: http://voiceofrussia.com/news/2014_03_04/268000581/

H/t - http://www.jsmineset.com/2014/03/17...-currencies-over-us-sanctions-threat-glazyev/
 
I'm with you Bug, but I have to wonder why they would want to piss of seven of Russia's most powerful ministers by freezing assets.
 
I believe that our idiots believe that pissing off some of the Russian oligarchs might make them think twice about their support for Putin's adventures. Next time. Most of them, however, were warned up front and pulled their assets from places the US could reach in the previous week, just like in Cyprus.
 
Well DC, I'm thinking primarily about our allies, which rely extraordinarily heavily on exports from Gazprom for their people and their respective economies. Germany I believe, gets around a third of their gas or more from pipes crossing Ukraine/Crimea. It would be a shame if Putin turned the nozzles off for a week or two.

That said, exactly who gives a flying fuck if Crimea is allied with Russia rather than subjugate themselves to the EU so they can undergo the usual asset stripping once they join? Oh that's right, the leftists in charge over in Brussels.
 
ancona said:
I'm with you Bug, but I have to wonder why they would want to piss of seven of Russia's most powerful ministers by freezing assets.
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They do NOT have a single solitary clue what they are doing. NO ONE in this administration EVER considers the REACTIONS to their ACTIONS. It is as if no one ever taught them that

For EVERY action there is and EQUAL and OPPOSITE reaction.
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For proof, just look at BummerCare.

In other words, the LAWS of physics, the LAWS of economics, etc, be damned in their eyes since they think they are gods and are ABOVE any and all laws. What goes around comes around. They will get theirs eventually. In the meantime we all suffer.
 
The biggest problem IMO is that barry keeps making us weaker and more vulnerable by flapping his lips and trying to talk tough. Everyone knows no military action will be taken when they annex Crimea. Now that Putin sees that the "harsh" penalties that he's being hit with are wrist slaps that he's been given enough forewarning to get his wrist out of the way, he won't have any 2nd thoughts about taking over Ukraine. More than likely no military action will be taken then either. Then it will probably come down to Poland again. If he isn't deterred by any real and harsh sanctions for taking the Ukraine, then he probably will be bold enough to invade Poland. Then will the EU and or NATO finally stand up to the bully when by then pretty much the only option will be force? Once again Poland could end up being the straw that breaks the camels back to start a war. Luckily thanks to barry our armed forces are going to be at around the same strength they were back in the 1930's! Those that don't learn from history are doomed to repeat it.
 
... Russia is preparing the announcement of the "Holy Grail" energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis. One which, as some especially on these pages, have suggested would lay the groundwork for a new joint, commodity-backed reserve currency that bypasses the dollar, something which Russia implied moments ago when its finance minister Siluanov said that Russia may regain from foreign borrowing this year. ...
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More: http://www.zerohedge.com/news/2014-...n-prepares-announce-holy-grail-gas-deal-china
 
I say it's their gas, and as such they can sell it to which ever country they want to. It is now, and never was, our business.
 
They should be able to sell it to whoever they want, but so should we with our oil, that's the only problem I see (not that that's russia's fault) we always have people over here trying to make sure we are playing with at least one arm tied behind our back. That's why we need to keep drilling, digging, refining, and selling, selling, selling.
 
The issue isn't so much whether they have the right to sell it to whoever they wish, it's more how this sale agreement (potentially) affects the petrodollar.
 
OPEC has been doing a lot more for a lot longer to keep that price high, and nobody seems to care. Funny though if the U.S. wants to sell more oil or drill more or god forbid build another refinery and pipelines all hell breaks loose from the environmentalists to people screaming we're racists because we want the arabs or venezuelans to be "poor" from low oil prices. Yeah, it would be awful if some sheik had to give up the solid gold toilet on his lear jet.
 
Follow up to Rickards' comments quoted in post #257:
...
Koos Jansen: Do you consider it a possibility the SDR will be the new world reserve currency backed by gold, like mentioned in Willem’s book The Big Reset? And following up on that, could it be all national currencies will be floating around such an SDR?

Jim Rickards: Yes, there is a probability the SDR will be the new global reserve currency. Gold and oil would be then be priced in SDR’s. It will be used for some of the balance of payments between countries, the creation of reserves and probably the financial accounts of the world’s largest corporations. So Siemens, General Electric and IBM will produce their financial statements in SDR’s, because they’re global corporations.


Koos Jansen: But will this SDR be backed by gold at a fixed parity?

Jim Rickards: It might be, this is where it gets interesting. That is not what our global leaders want. What they want is a paper SDR to replace the paper dollar. The question is, will people go along with that? Our global leaders may have to go back to gold not because they want to but because they need to restore confidence. It can go either way. The SDR project that will replace the dollar is already in the works. If the elites get enough time, they need about ten years, they will roll out a paper SDR. If the collapse comes sooner than that they’ll have to gold, or, if they insist on a paper SDR, they’ll have to go with martial law and neo-fascism.
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http://www.ingoldwetrust.ch/interview-jim-rickards-on-the-death-of-money
 
That's hilarious!

The SDR is nothing more than a basket full of unfulfilled promises made by various countries to "donate" or "contribute" money or gold to the IMF.

I guess one imaginary currency is just as valuable as the next, so why not?
 
Rickards didn't pull that out of his ass, by the way. It's been talked about in G8/G20, Davos, etc. for several years now.

I found a link to the following in the blog comments on the page referenced in the last post:
With March quickly coming to an end it appears there will be no passage of supporting legislation in Congress for the IMF 2010 Quota and Governance Reforms.

On Friday, the House of Representatives introduced a new aid bill for Ukraine which did not include the reforms. An earlier version of the bill did in fact include the reforms.

We are entering into a situation where the G20 countries have told the United States that they have until the Finance Ministers and Central Bank Governors meeting on April 10th and 11th to enact the required supporting legislation for the IMF Reforms.

This meeting is being held in Washington and it will certainly be a few days to remember.

Let’s recall that the G20 countries have stated that they will take aggressive measures to by-pass the United States and its veto power over the IMF Executive Board by the April meeting.

Let’s recall that Russia has threatened to dump its US Treasury Bonds and begin settling trade in other currencies other than the US dollar. As many have predicted, this will be the death of the petrodollar and reserve currency status of the American dollar.

America has but a few weeks to enter into multilateral agreements with the rest of the world and show its willingness to become part of a more balanced and centralized financial system. The financial power of the rest of the world has created a situation for the US where it is collapse or consolidation.
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http://philosophyofmetrics.com/2014/03/22/the-world-holds-suicidal-america-hostage/#more-318
 
Interesting.......

I say we hold out, since the other countries involved need us a hell of a lot more than they think. although they do in fact have huge reserves of those treasuries, they are only as good as we say they are.

I would recommend caution by Russia, China or any other nation making such decisions [crashing our economy].
 
America has but a few weeks to enter into multilateral agreements with the rest of the world and show its willingness to become part of a more balanced and centralized financial system. The financial power of the rest of the world has created a situation for the US where it is collapse or consolidation.
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I see this as more of the financial WEAKNESS of the U.S. (due to living beyond our means) has created ... blah, blah, blah.

We could torpedo a centralized system by simply and suddenly stopping the printing presses. Yes, it would hurt, and hurt big time, but if we do nothing, the hurt will be even bigger and for a much longer duration. I say it is time to take our medicine, no matter how bad it tastes, rather than wait until others force us to take it and have nothing left when every thing finally settles out.
 
...
As The South China Morning Post reports, Jukka Pihlman, Standard Chartered's Singapore-based global head of central banks and sovereign wealth funds (who formerly worked at the International Monetary Fund advising central banks on asset-management issues), notes that:...
At least 40 central banks have invested in the yuan and several others are preparing to do so, putting the mainland currency on the path to reserve status even before full convertibility.
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http://www.zerohedge.com/news/2014-04-08/40-central-banks-are-betting-will-be-next-reserve-currency
 
... Washington’s “foolish” imposition of sanctions on Russia over Crimea’s secession from Ukraine “has forced Moscow to react by selling Gazprom bonds not in the dollar market but rather in the fast-emerging Chinese Yuan.”

“The US has just shot itself in the foot,” he wrote.

Citing a new report by the International Monetary Fund, Engdahl said there has been a “dramatic shift” from the “US dollar as reserve currency.”
“The foolish [US President Barack] Obama sanctions threats against Moscow are simply accelerating the refocus of giant Russian companies like Gazprom and Norilsk Nickel to the huge Asian market,” wrote the analyst.
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He said following the “NATO-led Ukraine coup and ensuing crisis,” other countries “are looking to lessen their dollar exposure.”

The analyst said “stupid people” in the United States and NATO have failed to “think through or foresee the global consequences of their actions.”
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http://www.presstv.ir/detail/2014/04/18/359131/us-dollar-dying-as-kiev-tensions-rise/
 
Yeah, I think that could be a tipping point. Of course, neither our political class nor our media would ever mention it as a root cause issue.
 
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