http://jessescrossroadscafe.blogspot.com/2013/07/china-reported-planning-to-back-yuan.html
This is an interesting article for several reasons, not the least of which is that it is from a Russian publication and perspective, reflecting on the possible actions of China in the evolution of the global reserve currency regime.
As you know Russia is promoting a rethinking of the post Bretton Woods monetary system through their chairmanship of the G20 this year. There are other shoes to drop yet from that.
I suspect that China is playing chess here, or perhaps more appropriately the game of 'Go,' and not checkers. So snap judgements about what they are doing and why they are doing it are probably going to be fairly shallow. Most professionals and so-called experts are blinded by the status quo, lost in their own jargon and assumptions. There are many mechanics, but fewer systems thinkers.
Every action that is public masks a myriad of moves and countermoves done off the board and in quiet. Most who comment fail to grasp this because of cultural predilections.
Thoughts about capitalists selling rope do come to mind among other things relative to the short term and self-serving, stupidly greedy nature of the markets these days. But to borrow a phrase, economic power grows out of the barrel of a gun. It can call most hands.
Among other things the price discovery mechanism for gold currently resides with the Anglo-American financial establishment, which has been fairly shameless of late in shoving prices around the plate using paper leverage, and fixing key prices at will whether they reflect reality or not. That will have to be addressed. And I suspect it is well underway.
The terms of 'redeemability,' if any, are obviously of paramount importance in such a value reference to gold, as well as currency markets that are notorious for predatory practices, whether one wishes to acknowledge the rigging or not.
I am giving this more thought and will have other things to say about it in the future. But these are undeniably interesting times.
As you may recall, Bretton Woods was the name of the conference, taken from its location, that set up the post World War II international currency arrangement with the US dollar as the reserve currency of the world. It was based on a dollar convertible in gold.
When Nixon arbitrarily shut the 'gold window' in 1971 the world entered a reserve currency system of purely fiat dollars, often calledBretton Woods II.
There are a number of theories that suggest that such a system is not sustainable, for many of the same reasons that the euro is not sustainable.
And as some have remarked, the control of a currency by a small group of men operating in private is an exorbitant privilege.
But putting that aside, the BRICs in particular are not happy with the existing arrangement which has been slowly falling apart for some time as the Federal Reserve imposes its domestic needs and policy on what is intended to be the rest of the world's currency. It finds itself in much the same position as is Germany in the EU.
I have addressed this many times before, suggesting that the eventual outcome may be a reconstituted SDR-like instrument based upon a broader basket of currencies and the inclusion of gold and perhaps silver as well.
The Anglo-American banking cartel are fighting this at every turn, because as we know to control the world's currency brings remarkable power. I suspect quite of bit of the hysterical antagonism against gold and silver is tied up in this. And an ardent desire to 'cover up' some of their past shenanigans. Germany should put pictures of its gold on milk cartons.
It is possible that they will thwart the objectives of this effort and most likely this conference. And what will happen then is a continuing fragmentation of the world into regional trading zones and spheres of influence.
This may be used as a reason to propose a one world government, that will be similar in composition to the European Union and controlled by a few elite politicians and their bureaucrats.
We are eyewitness to one of the great events of economic history, and if anything it is remarkable how few economists and politicians understand what is happening. They are firmly embedded in their theory, and too often are willfully blind.
Let us free markets from regulation, the Banks from restraint of law, and the money creation process from the bindings of oversight and transparency, and we will reach new pinnacles of prosperity.
I find that a well educated layman with a grounding in history and the practical side of finance and business has a better understanding of what is going on than the great bulk of theoreticians whose models are heading quickly towards the dustbin. I just read a strikingly good letter from my friend Hugo Salinas-Price, that proposes a basic model for regulating international trade.
And I told him it would get nowhere, even though it was probably directionally correct, and about as good a start as many I have seen. The status quo and their hounds would rise up against it, because they are not ready to accept change.
They will produce many weighty and learned papers that 'prove' that it is wrong. And they will twist and torture the data to serve their ends no matter what the data may actually say. The Rogoff-Reinhart scandal is not an outlier in what is a generally disgraced profession. But these are signs of the times, where there is little downside and enormous profits for deceit in the obsessive pursuit of money and power, at least for the exorbitantly privileged.
Money is power, and those who love power above all seek to control any and all changes to its structure, for their own ends.
18 JULY 2013
China Reported Planning To Back the Yuan With Gold
As you know Russia is promoting a rethinking of the post Bretton Woods monetary system through their chairmanship of the G20 this year. There are other shoes to drop yet from that.
I suspect that China is playing chess here, or perhaps more appropriately the game of 'Go,' and not checkers. So snap judgements about what they are doing and why they are doing it are probably going to be fairly shallow. Most professionals and so-called experts are blinded by the status quo, lost in their own jargon and assumptions. There are many mechanics, but fewer systems thinkers.
Every action that is public masks a myriad of moves and countermoves done off the board and in quiet. Most who comment fail to grasp this because of cultural predilections.
Thoughts about capitalists selling rope do come to mind among other things relative to the short term and self-serving, stupidly greedy nature of the markets these days. But to borrow a phrase, economic power grows out of the barrel of a gun. It can call most hands.
Among other things the price discovery mechanism for gold currently resides with the Anglo-American financial establishment, which has been fairly shameless of late in shoving prices around the plate using paper leverage, and fixing key prices at will whether they reflect reality or not. That will have to be addressed. And I suspect it is well underway.
The terms of 'redeemability,' if any, are obviously of paramount importance in such a value reference to gold, as well as currency markets that are notorious for predatory practices, whether one wishes to acknowledge the rigging or not.
I am giving this more thought and will have other things to say about it in the future. But these are undeniably interesting times.
China reportedly planning to back the yuan with gold
July 17, 2013 special to RBTH Asia Pacific
Recent media reports suggest that Beijing is considering backing the yuan with gold. This decision, if taken, will likely affect China's economy and may trigger a new wave of the global economic crisis. For Russia, however, such a scenario may have its benefits.
According to media reports of early July, the People's Bank of China is mulling the possibility of phasing out the dollar as the reference currency for the yuan exchange rate, and to start using gold as the reference point.
The reports have not been confirmed officially, but analysts are warning that the step, if taken, will weaken the yuan and destabilise China's already troubled economy, ultimately provoking a new bout of the economic crisis worldwide.
Beijing's possible move to back the yuan with gold would not be meant as a strategic measure to strengthen the national currency and increase its attractiveness as an investment medium. Rather, it would be a flaunt aimed at demonstrating to the world (and to the USA in particular) that China is capable of taking the risks associated with a departure from the dollar standard. Experts warn however that, apart from benefiting no-one, such a decision may actually have catastrophic consequences.
Separating the yuan exchange rate from the US dollar may further weaken the American currency in the long run; in addition, China's monetary policy would become very much restricted, believes Evgeny Nadorshin, chief economist at AFK Sistema.
"The yuan will start fluctuating severely against the dollar and other major reserve currencies. This will affect the Chinese economy, which currently has serious problems as it is: the export revenues are falling, and the statistics for freight traffic and electricity consumption indicate a significant slowdown in business activity," says Aleksandr Golovtsov, head of the research department at UralSib Asset Management.
Given the current economic recession in China, backing the yuan with gold may further worsen the situation. In essence, China is running the risk of launching a new wave of the global economic crisis, experts concur...
Read the rest of the article here.
http://jessescrossroadscafe.blogspot.com/2013/04/reinventing-bretton-woods-global.html
25 APRIL 2013
Reinventing Bretton Woods: Global Finance In Transition - Currency Wars - Exorbitant Privilege
When Nixon arbitrarily shut the 'gold window' in 1971 the world entered a reserve currency system of purely fiat dollars, often calledBretton Woods II.
There are a number of theories that suggest that such a system is not sustainable, for many of the same reasons that the euro is not sustainable.
And as some have remarked, the control of a currency by a small group of men operating in private is an exorbitant privilege.
But putting that aside, the BRICs in particular are not happy with the existing arrangement which has been slowly falling apart for some time as the Federal Reserve imposes its domestic needs and policy on what is intended to be the rest of the world's currency. It finds itself in much the same position as is Germany in the EU.
I have addressed this many times before, suggesting that the eventual outcome may be a reconstituted SDR-like instrument based upon a broader basket of currencies and the inclusion of gold and perhaps silver as well.
The Anglo-American banking cartel are fighting this at every turn, because as we know to control the world's currency brings remarkable power. I suspect quite of bit of the hysterical antagonism against gold and silver is tied up in this. And an ardent desire to 'cover up' some of their past shenanigans. Germany should put pictures of its gold on milk cartons.
This may be used as a reason to propose a one world government, that will be similar in composition to the European Union and controlled by a few elite politicians and their bureaucrats.
We are eyewitness to one of the great events of economic history, and if anything it is remarkable how few economists and politicians understand what is happening. They are firmly embedded in their theory, and too often are willfully blind.
Let us free markets from regulation, the Banks from restraint of law, and the money creation process from the bindings of oversight and transparency, and we will reach new pinnacles of prosperity.
I find that a well educated layman with a grounding in history and the practical side of finance and business has a better understanding of what is going on than the great bulk of theoreticians whose models are heading quickly towards the dustbin. I just read a strikingly good letter from my friend Hugo Salinas-Price, that proposes a basic model for regulating international trade.
And I told him it would get nowhere, even though it was probably directionally correct, and about as good a start as many I have seen. The status quo and their hounds would rise up against it, because they are not ready to accept change.
They will produce many weighty and learned papers that 'prove' that it is wrong. And they will twist and torture the data to serve their ends no matter what the data may actually say. The Rogoff-Reinhart scandal is not an outlier in what is a generally disgraced profession. But these are signs of the times, where there is little downside and enormous profits for deceit in the obsessive pursuit of money and power, at least for the exorbitantly privileged.
Money is power, and those who love power above all seek to control any and all changes to its structure, for their own ends.
Global Finance in Transition conference to take place in Istanbul
On May 7-8, 2013, Istanbul (Turkey) will host the Global Finance in Transition conference. The event is organized by the Central Bank of the Republic of Turkey jointly with the Reinventing Bretton Woods Committee and the Russian Ministry of Finance.
Representatives of G20 finance ministries and central banks, international organizations, research institutions and businesses will take part in the conference. Head of Turkey's Central Bank Erdem Basci, Deputy Minister of Finance of Russia Sergei Storchak and Executive Director for the Reinventing Bretton Woods Committee Marc Uzan will give the opening remarks at the conference.
Five panel discussions are planned as part of the event. They will cover the international financial architecture, in particular, changes in the flow of global investments, local bond markets and growth in emerging economies, incentives and determinants of investment and other issues.
In addition it is expected that new instruments and incentives for making the global financial system safer will be suggested during the forum.
You may visit the conference web site by clicking here.
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