http://www.zerohedge.com/news/2013-10-13/chinas-official-press-agency-calls-new-reserve-currency
Submitted by Tyler Durden on 10/13/2013 14:32 -0400
Submitted by Tyler Durden on 10/13/2013 11:15 -0400
China's Official Press Agency Calls For New Reserve Currency, And New World Order
We assume it is a coincidence that on the day in which we demonstrate China's relentless appetite for gold, driven by what we and many others believe is the country's desire to have a call option on a gold-backed reserve currency when the time comes, just posted in China's official press agency, Xinhua, is an op-ed by writer Liu Chang in which he decries the "US fiscal failure which warrants a de-Americanized world" and flatly states that the world should consider a new reserve currency "that is to be created to replace the dominant U.S. dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States."
Of course, if China were serious, and if the world were to voluntarily engage in such a (r)evolutionary reserve currency transition, then all Magic Money Tree theories that the only thing better than near infinite debt is beyond infinite debt, would promptly be relegated to the historic dust heap of idiotic theories where they belong.
Some of China's (which as a reminder is the single largest offshore holder of US Treasury paper, and the second largest of all only second naturally to the Federal Reserve whose $85 billion in monthly monetizing "flow" is what is keeping rates from exploding higher) thoughts as captured in the Xinhua Op-ed:
- Reform of the world’s financial system should include the introduction of a new international reserve currency to replace the U.S. dollar
- The international community could thus permanently stay away from the spillover of intensifying domestic political turmoil in the U.S.
- Fiscal impasse in the U.S. is a good time for “befuddled world” to start considering building a “de-Americanized world”
- Impasse has left many nations’ dollar assets in jeopardy and the international community agonized
- Other cornerstones should be laid to underpin a de-Americanized world, including respect for sovereignty, recognizing authority of UN in handling global hotspot issues and giving developing and emerging market economies more say in major international financial institutions
- Purpose of such changes is not to “completely toss the United States aside,” rather to encourage Washington to play a much more constructive role in addressing global affairs
Of course, if and when the day comes that the USD is no longer the reserve currency, kiss America's superpower, or any power, status, which is now based purely on the USD's reserve currency status, and the ability to fund half the US budget deficit with debt promptly monetized by the Fed, goodbye.
Finally, as a reminder...
From Xinhua:
U.S. fiscal failure warrants a de-Americanized world
As U.S. politicians of both political parties are still shuffling back and forth between the White House and the Capitol Hill without striking a viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanized world.
Emerging from the bloodshed of the Second World War as the world's most powerful nation,the United States has since then been trying to build a global empire by imposing a postwar world order, fueling recovery in Europe, and encouraging regime-change in nations that it deems hardly Washington-friendly.
With its seemingly unrivaled economic and military might, the United States has declared that it has vital national interests to protect in nearly every corner of the globe, and been habituated to meddling in the business of other countries and regions far away from its shores.
Meanwhile, the U.S. government has gone to all lengths to appear before the world as the one that claims the moral high ground, yet covertly doing things that are as audacious as torturing prisoners of war, slaying civilians in drone attacks, and spying on world leaders.
Under what is known as the Pax-Americana, we fail to see a world where the United States is helping to defuse violence and conflicts, reduce poor and displaced population, and bring about real, lasting peace.
Moreover, instead of honoring its duties as a responsible leading power, a self-serving Washington has abused its superpower status and introduced even more chaos into the world by shifting financial risks overseas, instigating regional tensions amid territorial disputes, and fighting unwarranted wars under the cover of outright lies.
As a result, the world is still crawling its way out of an economic disaster thanks to the voracious Wall Street elites, while bombings and killings have become virtually daily routines in Iraq years after Washington claimed it has liberated its people from tyrannical rule.
Most recently, the cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations' tremendous dollar assets in jeopardy and the international community highly agonized.
Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated, and a new world order should be put in place, according to which all nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing.
To that end, several corner stones should be laid to underpin a de-Americanized world.
For starters, all nations need to hew to the basic principles of the international law, including respect for sovereignty, and keeping hands off domestic affairs of others.
Furthermore, the authority of the United Nations in handling global hotspot issues has to be recognized. That means no one has the right to wage any form of military action against others without a UN mandate.
Apart from that, the world's financial system also has to embrace some substantial reforms.
The developing and emerging market economies need to have more say in major international financial institutions including the World Bank and the International Monetary Fund, so that they could better reflect the transformations of the global economic and political landscape.
What may also be included as a key part of an effective reform is the introduction of a new international reserve currency that is to be created to replace the dominant U.S. dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States.
Of course, the purpose of promoting these changes is not to completely toss the United States aside, which is also impossible. Rather, it is to encourage Washington to play a much more constructive role in addressing global affairs.
And among all options, it is suggested that the beltway politicians first begin with ending the pernicious impasse.
http://www.zerohedge.com/news/2013-10-13/chart-day-china-imports-over-2000-tons-gold-last-two-years
Chart Of The Day: China Imports Over 2,000 Tons Of Gold In Last Two Years
China has just one thing to say to all those who engage in the now daily slamdowns of gold just around the time of the London fixing, after 8 am Eastern, which lately have gotten so vicious they have resulted in "stop logic" market halts not on one but at least two occasions, keeping the price of gold delightfully low for all those who instead of selling, are looking to buy: "thanks."
As the chart below shows, in the past two years since September 2011 (ironically the same month we wrote "Wikileaks Discloses The Reason(s) Behind China's Shadow Gold Buying Spree" namely that the PBOC was quietly seeking to make the renminbi the new gold-backed reserve currency) the mainland has imported an unprecedented 2,116 gross tons of gold from Hong Kong (in addition to the hundreds of tons produced domestically), for the first time crossing the 2k gross ton import barrier in a two year period!
Focusing on just the most recent import data for the month of August, seemingly unaware that all expert, hedge funds in the US have been "capitulating" on gold just because the momentum trade is no longer there, and because it somehow makes more sense to buy gold when the price is high rather than low, shows that China imported 131.4 gross tons of gold in the month, a 146% increase compared to a year prior, when the price of gold was substantially higher. Indeed, in a "shocking" turn of events, China actually buys more physical gold when the price is lower than higher. So much more, in fact, that August was the second highest gold importing month in history, lower only compared to March when it imported an unprecedented 223.5 tons.
But what about exports of gold, and China's net monthly gold needs. The chart below should answer that particular question. Net of gold export to Hong Kong, China imported 110.5 tons, the second highest net number in history, and second once again, only to March's 136.2 tons. Year to date, China has imported a gross 997 tons, and a net 741 tons. Since this accounts for just two-thirds of the year in the history books, on a gross and net basis, China will likely import over 1500 gross and over 1000 net tons for all of 2013: an absolutely stunning record in gold demand by just one nation.
Finally, putting all this feverish gold accumulation in perspective, here is the latest amount of official Chinese gold holdings as per the IMF. Incidentally, this is a number that has not been "updated" since April 2009.
The unofficial China gold holdings number since 2009 based on our internal calculations:about 2500 tons higher, which would make it the world's second largest official gold holder below the US and surpassing Germany, and rising at 100 tons per month.
Source: HK Census Dept
Of course this assumes the US , Germany and France have anywhere near the gold alleged ( maybe there is a good reason " World Official Gold Holdings " of the IMF have not updated since 2009 in the chart above ! ) Fortunately , we can give consideration to World Bank data below as to whether certain countries have what they say they have .....
http://harveyorgan.blogspot.com/2013/10/oct-2world-gold-bank-records-no-gold.html
Fellow Canadian Bryant Blake (who goes by the handle Rhody) has discovered something huge with respect to accounting for gold by the World Bank. The world bank has hinted in the past that it wished to discount leased gold. Its looks to me that they followed through on their promise. I will send this to Reg Howe is the authority on these matters and I will report back on his findings.
from Bryant Blake
"please feel free to bring in any of your associates to investigate the drop in reserves for the U.S, Germany, and France that is shown on the World Bank reserve table
http://data.worldbank.org/indicator/FI.RES.TOTL.CD.
You might want to post the world bank link table on LeMet in case the world bank removes it from the public domain. Below is a table which converts the drops in reserves to drops in gold holdings. Based on the numbers, all of the U.S. and German gold, and most of the French gold is gone if it is assumed that SDR and currency reserves stayed the same from 2011 to 2012. Even if the SDR and currency reserves for these countries dropped to zero, the 2012 reserves indicate gold holdings dropped about 70%. -Bryant
***
More from Bryant...
http://www.usmint.gov/about_the_mint/?action=annual_report The 2012 us mint report on page 42 reports deep storage gold with a market value of $435 billion on 9/30/12. This compares with end of 2012 us reserve per world bank of $139.1 billion. I remember some talk of the World Bank discounting leased gold a few years ago. If they have implemented this it appears the us has leased all of its gold and has none which is unencumbered.
from Bryant Blake
"please feel free to bring in any of your associates to investigate the drop in reserves for the U.S, Germany, and France that is shown on the World Bank reserve table
http://data.worldbank.org/indicator/FI.RES.TOTL.CD.
You might want to post the world bank link table on LeMet in case the world bank removes it from the public domain. Below is a table which converts the drops in reserves to drops in gold holdings. Based on the numbers, all of the U.S. and German gold, and most of the French gold is gone if it is assumed that SDR and currency reserves stayed the same from 2011 to 2012. Even if the SDR and currency reserves for these countries dropped to zero, the 2012 reserves indicate gold holdings dropped about 70%. -Bryant
| Change in Sovereign Reserves | |||
| Country |
United States
|
Germany
|
France
|
| 2011 Gold Price |
$1531/oz
|
$1531/oz
|
$1531/oz
|
| 2011 Total Reserves($Mil) |
530,267
|
234,104
|
168,490
|
| 2011 Gold equivalent of reserves (mil oz) |
350.92
|
152.91
|
110.05
|
| 2011 Gold equivalent of reserves (Tonnes) |
10,915
|
4,756
|
3,423
|
| Official Gold Reserves 9/13 (Tonnes) |
8,134
|
3,391
|
2,435
|
| % Gold value of total reserves |
74.5%
|
71.3%
|
71.1%
|
| % Gold value of total reserves WGC 9/13 |
71.6%
|
68.6%
|
66.8%
|
| 2012 Gold Price |
$1657/oz
|
$1657/oz
|
$1657/oz
|
| 2012 Total Reserves($Mil) |
139,138
|
67,422
|
54,230
|
| 2012 Gold equivalent of reserves (mil oz) |
83.97
|
40.69
|
32.73
|
| 2012 Gold equivalent of reserves (Tonnes) |
2,612
|
1,266
|
1,018
|
| Drop in Gold Reserve (mil oz) |
266.95
|
112.22
|
77.32
|
| Drop in Gold Reserve (Tonnes) |
8,303
|
3,490
|
2,405
|
| Remaining Gold (Tonnes) |
0
|
0
|
30
|
| Total Gold Reduction (Tonnes) = 13,930 | |||
| Total Gold Reduction (Mil Oz) = 447.86 | |||
More from Bryant...
http://www.usmint.gov/about_the_mint/?action=annual_report The 2012 us mint report on page 42 reports deep storage gold with a market value of $435 billion on 9/30/12. This compares with end of 2012 us reserve per world bank of $139.1 billion. I remember some talk of the World Bank discounting leased gold a few years ago. If they have implemented this it appears the us has leased all of its gold and has none which is unencumbered.
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