Archive for the Dollar – World’s Reserve Currency Category

USA + FRN/PD – – > IMF + SDR – – > NDB + UMU? The “Universal Monetary Unit” . . . Coming To a Planet Near You (January 2, 2017)

Posted in AIIB, Banks and Banking System, Book Reference, BRICS, CFETS, CIPS, Dollar - World's Reserve Currency, Gold, Gold Standard, Hyperdive Economic Collapse, International Finance, International Monetary Fund, Money, Petrodollar, SDR - Special Drawing Rights, Special Drawing Rights (SDR), Trade, Universal Monetary Unit, World's Reserve Currency on January 2, 2017 by e-commentary.org

. . .

K          “Remember way back on October 1 when the International Monetary Fund (IMF) implemented the modified composition of the Special Drawing Rights (SDR) that includes for the first time the Chinese Renminbi (RMB) along with the United States Dollar (FRN/PD), the Euro (€), the British Pound Sterling (£) and the Japanese Yen (¥) in the Great Valuation Basket?”

J          “Couldn’t forget.  To celebrate the transition, we got the entire day off.”

K          “The Federal Reserve Note/PetroDollar maintained its percentage share of the portfolio with the Euro, Pound and Yen yielding room for the new kid on the block.  The way I see it, the evolution of the SDR may be too slow for Brazil, Russia, India, China and South Africa (the BRICS countries) and other countries (the BRICS+ countries) and still leaves the FRN/PD as the world’s reserve currency.”

J          “They say more countries are getting cranky that the FRN/PD remains the mandatory currency peg for trade on the global market.  Last Thursday, the China Foreign Exchange Trade System (CFETS), the foreign exchange trading platform operator, announced that it is adjusting the way it calculates the CFETS Yuan Index which is a critical measure of the Yuan against a basket of currencies, starting yesterday.”

K          “And you got the entire day off.” 

J          “And today, for good measure.  They say that the USA will not allow the IMF to revisit the composition of the SDRs again for years.  The problem for the BRICS+ countries is that the United States has veto power over the composition of the SDR and will block any attempt to accelerate the transition to incorporate other currencies.”

K          “Think about this possible scenario.  The BRICS+ countries may make an end run and expand the mandate and activities of what is now known as the New Development Bank (NDB) and create a Universal Monetary Unit (UMU) constituted of the Chinese RMB, Russian Ruble, Indian Rupee, South African Rand, Brazilian Real, good old gold (Alpha uniform) and a smorgasbord of other currencies.”     

J          “While they are at it, the South African Kruggerand could supplant the Rand and serve as the gold component or part of the gold component.”

K          “Who knows, when they do that, you may get the week off of work.”

J          “Count me in and count me off.  And to provide for a smoother transition, include in the new generation UMU the current currencies in the SDR in diluted amounts.  A measured and gradual approach is prudent.  Interdependent economies and unintended consequences, you know.”

K          “While they are at it, they could go full in.  The Cross-Border Inter-Bank Payment System sometimes known as the China Interbank Payment System (CIPS) could develop into a comparable transnational multilateral payment system as a complement to and to compete with the Society for Worldwide Interbank Financial Telecommunication (SWIFT).”

J          “That’s exactly what I was going to suggest.  An economy needs a ‘thing’ to serve as money/currency/chits/script/wampum and a means to reconcile payments.  The BRICS+ countries have no reason to wait another half decade when they can do it themselves.”

. . .

J          “Or the BRICS+ countries may force the issue at the IMF meeting in Rome, District of Columbia on April 21 – 23.”

K          “And you will get at least two days off of work.”

J          “Can’t forget.  Stay tuned.”

. . .

K          “Someone surely has thought and wondered about these possible developments.”

J          “You think?  I wonder if anyone cares.  What’s on tv?”

. . .

[See the e-commentary at “The Mandibles, FRNs, SDRs, IMF, G20, WTD! (September 5, 2016)” and “Dollar – World’s Reserve Currency”.]

Bumper stickers of the week:

The “Universal Monetary Unit” . . . Coming To a Planet Near You

Paper [Money] Is Patriotic

Fight the War on Cash

 

The Mandibles, FRNs, SDRs, IMF, G20, WTD! (September 5, 2016)

Posted in Book Reference, Collapse, Courts, Debt/Deficits, Dollar - World's Reserve Currency, Federal Reserve, Gold, Gold Standard, Guns, INFORM Act, International Finance, International Monetary Fund, Journalism, Money, Newspapers, Petrodollar, Press/Media, SDR - Special Drawing Rights, Silver, Silver Standard, Special Drawing Rights (SDR), World's Reserve Currency on September 5, 2016 by e-commentary.org

. . .

X          “Some of the folks at the G20 Summit may kick around the future composition of the ‘Special Drawing Rights’ that is emerging as the new world’s reserve currency.  The International Monetary Fund formally sets the composition of the SDRs, yet the major players gathered in China yesterday to discuss such matters.  A thing is now being described as a right.”

Z          “Sounds like they are creating a right to reach first for your gun.”

X          “Or they are sketching a new picture of the economic future based on rights rather than on power and circumstance.”

Z          “Or someone special who has been allowed to have the only gun in the great currency gunfight now must play well with others who are suitably armed.”

X          “Or the one with the big gun is now being disarmed.”

. . .

X          “Felicitous publication really.”

Z          “Timely, even.  The times they are changin’ the way we will make change in the near future.”

X          “In The Mandibles, Lionel Shriver adopts Keynes’ term ‘Bancor’ rather than the new age term ‘SDR’ to describe supplementary foreign exchange reserve assets.  As the U.S. Petrodollar slips as the world’s reserve currency and then as the dominant component of the SDR/Bancor, the United States people will slip to second-world status in the world.”

Z          “The way I describe it, when the Petrodollar is no longer the big dog, the United States is no longer the leader of the pack.”

X          “Prices will increase and perhaps double in short order before more structural disorder devolves.  Our McMansions still will sport baroque brushed nickel bathroom fixtures in the multiple bathrooms, yet in due course the water coursing through the corroding pipes will be increasingly intermittent and decreasingly safe.”

Z          “Many of us have those problems now while everything appears to be dory hunky.”

. . .

X          “Her description of the human consequences is very plausible, yet her explanation for the underlying causes is only partially complete.  Contemporary economic doctrine is exposed as voodoo and a specious secular religion that rationalizes those in power acquiring and retaining wealth.  The entitlement Ponzi scheme receives appropriate blame.  The pernicious involvement of the Federal Reserve is alluded to obliquely, yet the entrenched corruption and incompetence in every quarter are not addressed.”

Z          “She does not describe the institutions that are failing systematically and simultaneously.  Congress, courts, executives and executive agencies, bureaucrats, universities, news outlets, parents, preachers, prophets, you name it.  At some time, a fragile, fractured, fissured and fundamentally weak system of manipulation and intervention will fail with consequence.”

X          “She does observe that the traditional news fashioners are defunct.”

. . .

X          “‘The Chip’ is first described in an e-commentary titled ‘Monitoring The Masses:  The Card And The Chip’ published on January 12, 2015.  She further develops the human impact of implanting ‘The Chip’ to control and corral the masses.  ‘The Chip’ is so much more efficient and effective than the corn chip and football at sating the populace.”

Z          “‘The Chip’ is an electronic lobotomy that is more powerful, pervasive and perverse than fear or drugs.  Technology saves us.  I think that is what one would conclude.  Surely.”

. . .

X          “An empire cannot continue to mimeograph a fiat currency and force it on the rest of the world at great cost and consequence to the rest of the world without the rest of the world demurring at some point.”

Z          “And the rest of the world is becoming restive.”

X          “They are issuing SDR-denominated bonds.”

Z          “And they are selling oil without even acknowledging the Petrodollar.”

. . .

X          “In her novel, the U.S. government confiscates gold and disregards even basic civil liberties while confiscating the yellow stuff.”

Z          “Survey the universe of commentary on the subject and you discover that no one has ever even questioned that the government will confiscate gold when the stuff competes with the fake stuff.”

X          “The people of the United State of Nevada who seceded from the dysfunctional disunion agree that it is ‘dumb’ and ‘arbitrary,’ but they base their currency the ‘Continental’ on the gold standard.”

Z          “She does not see that the government would have eliminated cash of any kind years or decades earlier.”

X          “That is one of the harbingers of great danger.  When the government outlaws or confiscates Au, Ag, Fe, Pb, or even worthless fiat cash, the end of civil rights and civil liberties is near.”

Z          “Or here.”

 . .

[See the e-commentary at “Monitoring The Masses:  The Card And The Chip (January 12, 2015)”, “Brave 1984 Farm:  The Best Of All Possible Worlds (March 19, 2012)” and the e-commentary on the institutional distractions in our society at “Foot Longs and Football (September 2, 2013).”]

Bumper stickers of the week:

G20 > G7; SDR > FRN; World > USA   

In the intermediate run, a Kleptocracy is unsustainable.

The Gold Standard Revisited  (August 15, 2016)

Posted in Book Reference, Dollar - World's Reserve Currency, Gold, Gold Standard, Money, Nobel Prize, Noble Prize, Petrodollar, SDR - Special Drawing Rights, Silver, Silver Standard on August 15, 2016 by e-commentary.org

. . .

M          “You may be right.”

G          “I don’t want to be right.  But you just cannot trust the government.”

M          “It will never seem reasonable, but it is rational.  We must do something to restrain human nature and government excess.”

. . .

G          “Gold is an element.  Gold is a commodity.  Gold is a currency if folks act as if it is a currency.  Gold is what you make it.  The vote is coming in.  The Swiss not so much but who knows what to make about the election.  Those who vote in favor of the dollar or the pound and against gold as a currency may soon be . . . pounding sand.”

. . .

G          “As I recall, Keynes proclaimed that the gold standard, not gold per se, is a ‘barbarous relic.’  ‘Barbarian’ means ‘foreign.’  For example, ‘Barbara’ is a ‘foreign woman.’  So that might suggest that the gold standard, or at least gold, is popular in foreign countries.  And it is.  One point four billion Chinese and one point three billion Indians relish the element.  The Russians embrace it with both paws.”

M          “Seems that Au is A1 in the world today.”

. . .

M          “Tying human activity to an element such as Au seems so . . . confining.  And elemental.  Yet without something tethering human greed, ‘printing money’ is a temptation too great.  If he had known about it, Bill Shakespeare would have written about it.”

G          “You cannot trust the government.  And yet the great irony is that the government is not printing money.  The government has ceded power to the Federal Reserve which sounds like the government and yet is a private business that owes its allegiance to the banks and advances the welfare of the those in the stock market racket.” 

. . . 

M          “Keynes criticized the gold standard because it was a direct threat to his ego and his identity and his desire to make unbridled decisions.  That is the hallmark of what passed for the elite.”

G          “No one in power wants to be restrained by a standard.  Some standard is better than no standard.”

. . .

G          “The rule of law is a civilizing relic yet not one in currency today.  Even with more rules and laws on the books than ever in the history of humankind, the rule of law simply does not apply to those in power.  The law is no restraint.”

. . .

G          “The Nobel gang rewards those who shill for the fiat system and the central banks.  If the Nobel gang gave awards for those who ask probing questions about the viability and consequences of fiat currency and unrestrained debt, there would be more folks asking probing questions about the viability and consequences of fiat currency and unrestrained debt.”

M          “Perhaps the new Noble Prize in Eco-nomics can be awarded to those few individuals who ask probing questions and provide trenchant answers.”

. . .

[See the previous great gold standard debate in the e-commentary at “Is The Gold Standard Really The Gold Standard? (January 18, 2010)”, a discussion of the silver standard at “The Silver Standard:  The Value Of (Sort Of) Real Money (July 15, 2013)” and the observation in “The U.S. And Saudi Arabia:  Not Playing Well With Others (Each Other) (July 11, 2016)” that President Nixon decided unilaterally to cancel the direct international convertibility of the United States dollar to gold today.]

Bumper stickers of the week:

“In truth, the gold standard is already a barbarous relic.”  John M. Keynes, A Tract on Monetary Reform (1924).

“Real gold is not afraid of the fire of a red furnace.”  Chinese proverb

“There are three hundred economists in the world who are against gold, and they think that gold is a barbarous relic – and they might be right.  Unfortunately, there are three billion inhabitants of the world who believe in gold.”  Attributed to János Fekete

In every country, culture and civilization through space and across time, gold is the one thing and the only thing that has been cherished by everyone everywhere at all times.

Eco-nomic SAT Question:  Which statement does not fit:  1) resources are finite, 2) water is finite, 3) gold is finite or 4) money printing is infinite?

The Gold Standard may just be the Gold Standard or at least a standard.

The G20 Leaders Summit is in Hangzhou, China this September 4 and 5.

Convention between the United States and Great Britain (for Canada) for the Protection of Migratory Birds, also called the Migratory Bird Treaty, was signed on August 16, 1916.

The Percolating Middle East (February 22, 2016)

Posted in China, Dollar - World's Reserve Currency, Iran, Iraq, Middle East, Russia, Syria on February 22, 2016 by e-commentary.org

. . .

8          “On one side you have Saudi Arabia, Qatar, Turkey and the soldiers from the Sunni region of Iraq with some of its members d.b.a. (doing business as) ISIS or ISIL or IS.  They are the ‘Sunni Squad’.”

7          “Yet Saudi Arabia and Turkey really do not like each other.”  

8          “They just hate each other slightly less.  On the other side, you have Syria, Iran, Russia and the Kurds in the region who hate Turkey.  They are loosely the ‘Shiite Squad’.”

. . .

7          “Turkey has cited Article 5 of the North Atlantic Treaty and demanded that an attack on one member is an attack on all members.  Thus, Turkey contends that NATO nations must come to its assistance.  Right.”

8          “And thus join the ‘Sunni Squad’ and assist ISIS or ISIL or IS.”

7          “Challenge Saudi Arabia and lose its support for the PetroDollar.  Without the PetroDollar, the United States slides into second world status.”

8          “Or join the Russian gang and ally with the ‘Shiite Squad’ which is likely to be the winner if there is a winner.”

. . .

8          “Now which squad is China supporting?”

. . .

[See the e-commentary at Seriously Sizing Up Syria Seizing Up (October 12, 2015).]

Bumper sticker of the week:

The enemy of my enemy is my enemy?

Rerouting History (February 15, 2016)

Posted in Civil War, Dollar - World's Reserve Currency, Iran, Race, Slavery, Society, South, Southern Strategy, Uncategorized on February 15, 2016 by e-commentary.org

. . .

K          “Any GPS system will take you to the intersection of Ronnie Reagan Road and Saddam Hussein Highway without hesitation or reflection.”

J          “Or irony or regret.  But Quantrill was a domestic terrorist whereas Hussein threatened the supremacy of the U.S dollar as the world’s reserve currency and was not nice in an area with many not nice people.  We Americans should celebrate our own.”

K          “Our own what?”

. . .

K          “Changing the names of streets and schools does not rewrite history, it changes the names of the individuals who are celebrated on streets and schools.”

J          “I have found that those people who want to keep William Quantrill Circle are also those people who claim that the Civil War was about state’s rights rather than about slavery.”

K          “Streets and schools should be named after heroes not villains.  The history books should be written to reflect the actual history including the actual exploits of the heroes and the villains.”

. . .

K          “Not only are Stuart and Lee going down the road, Washington and Jefferson also will be sent down a trail renamed after someone else.”

J          “Rename the ‘Washington Monument’ on the Mall as the ‘George Washington Carver Monument’?”

K          “Then we could still refer to it generically as the ‘Washington Monument’ on the Mall.”

. . .

[See the e-commentary at The Confederate Flag:  What Does It Mean To You? (July 6, 2015) and Columbus And The Redskins (October 14, 2013).]   

[See the e-commentary at Has Scalia Gone Feral (March 4, 2013) and One Gun Per White Adult Male?  A Flintlock Musket?  The “One Man, One Gun” Decision (October 4, 2010).]

 

Bumper stickers of the week:

Happy Presidents’ Day

Celebrate heroes on streets and schools; chronicle the activities of the heroes and villains in the history books.

USA, FDIC, Or NCUA? LCU? SPCU? (October 19, 2015)

Posted in Bail In, Bailout/Bribe, Banks and Banking System, Boycott Series, Collapse, Credit Unions, Debt/Deficits, Depression, Dollar - World's Reserve Currency, Federal Reserve, Gold, International Finance, Kleptocracy, Money, SDR - Special Drawing Rights, Silver on October 19, 2015 by e-commentary.org

. . .

B          “I want out of the Racket – the stock market Racket.  I want to hold my deferred compensation in the form of dollars, for what they are worth.  As I see it, Treasury Bills and Treasury Bonds are allegedly protected by the ‘full faith and credit’ of the United States.  What is that worth?  When the Big Jolt hits, what is Uncle Sam’s telephone number?  Or e-mail address?  unclesam@unclesam.gov?  A general promise by the Uncle when I have full faith that the credit of the United States is sketchy, provisional and conditional at best.  I won’t touch Treasury Bills or Treasury Bonds.”

C          “Another hollow and worthless promise.  I won’t touch Treasuries and refuse to deposit money in a bank.  The FDIC (Federal Deposit Insurance Corporation) allegedly provides insurance for banks, yet the agency is ‘stressed’ to put it mildly and will not pay all claims in the event of a significant bank run.  The NCUA (National Credit Union Association) allegedly provides insurance for credit unions and may provide some insurance protection for some time for some depositors.  I am willing to make a tentative commitment to the system and keep some of my funds in my Local Credit Union (LCU).”

B          “Depositing a healthy chunk of money in the Sealy Posturepedic Credit Union (SPCU) involves little counterparty risk and allows me to sleep peacefully at night.  When the Big Jolt hits, there will not be enough physical dollars.  Regular folks may accept regular dollars for two related reasons – inertia and habit – until the shock triggers them to do something and change their habits.  Regular folks will accept the few available physical dollars for four or six or eight weeks for transactions as long as other citizens accept dollars for transactions.  Then regular folks will only accept Sacagawea dollars and some coins for a few weeks, although coins like dollars of any kind are in short supply today.  After a few more weeks, some informed folks will accept silver coins minted before 1964 at a premium.”

C          “In the end, the Depression is our guide.  Twelve gauge shot gun shells may be another medium of exchange and twenty-two rounds may be used as change to support the emerging barter economy.  Cash of any kind is the threat to the those who run System.  The government now requires banks to obtain and record the identity of anyone making a cash deposit and are refusing to accept cash for some payments.”

B          “Banks do not need deposits to be able to loan money.  Yet today many banks are offering gimmicks and gewgaws to attract funds that they will be able to retain during a ‘bail in’ without any obligation to the depositor.”

. . .

C          “Junior’s paper route money stored in his piggy bank may be our only available liquid asset.”

B          “She may not stand for us withdrawing some of the Standing Liberty quarters from the collection she has accumulated with her baby sitting money.”

C          “We may need a bushel basket of Wheat Pennies to buy a pocketful of wheat.”

B          “When the banks are maneuvering to avoid a haircut, we may be required to go to our Barbers.”

. . . 

[See the e-commentary at Preserve Cash; Preserve (Some) Privacy (May 4, 2015), “Bail Ins” Are Globalized; “Bail Outs” Are Bailed Back In; No Bail For Bankers (December 29, 2014), Globalizing The Bail In (July 8, 2013), Bailouts: Out; Bail Ins: In; Slowly Boilin’ The Frog (April 15, 2013), Money “In The Bank” Or “Under The Mattress” (October 8, 2012), Boycott Big Banks – Vote Your Dollars (November 21, 2011), and Boycott Big Banks (February 1, 2010).]

Bumper stickers of the week:

The U.S. government is pursuing an international currency war and a domestic war on currency.

SPCU/You > LCU/NCUA > Bank/FDIC > Uncle Sam/FF&C

Seriously Sizing Up Syria Seizing Up (October 12, 2015)

Posted in Afghanistan, Bush, Climate, Dollar - World's Reserve Currency, Foreign Policy, Global Climate Change, Global Warming, Iran, Iraq, Middle East, Newspapers, Russia, Sports, Syria, Vietnam, War on October 12, 2015 by e-commentary.org

. . .

7          “They could make it easier if they wore jerseys with numbers.”

8          “The good folks could sport odd numbers and the bad folks could sport even numbers on their uniforms.”

7          “Or the good folks could use even numbers and the bad folks could use odd numbers.  Or use different defining colors.  Or stitch the sponsor of the team on the back of the jersey.”

8          “During the Southeast Asian War Games conducted in ‘nam, a ‘Stars and Stripes’ newspaper cartoon depicted two identical individuals in pajamas and flip flops – one described as ‘Friend’ and one described as ‘Enemy’.”

7          “Nothing changes.  Discerning one’s friends and one’s enemies among those wearing towels and sandals is vexing.”

8          “The great feud between the Shia and the Sunni seems akin to the great feud between the Hatfields and McCoys.  No one was right and no one really knew what they were fighting for and no one really knew why they were fighting.”

7          “The reality is that the enemy of my enemy is not my friend, the enemy of my enemy is my enemy.”

. . .

7          “Most folks are more comfortable with what the nerdy folks describe as a ‘Manichean’ division into good and bad, or right and wrong, or us and them.  International relations are described as a balance of power and depicted with a scale.  A pint of water on one side can be balanced with a pound of whatever on the other side.  Yet international relations are more akin to multiple Calder mobiles strung and hung together.  Tug on one string and everything tips out of balance.  The unprovoked invasion of Iraq by then President Cheney and Vice President Bush in 2003 was the great tug that triggered the imbalance accelerating today.”

8          “Toss a rock in the pond and watch the concentric circles and the eccentric responses.  The lack of water in Syria and other places is fueling the fury.  A drought of water leads to a drought of hope.  The world is transitioning from wars over oil to wars over water.”

7          “And wars over currency.  Everything is out of balance.”

8          “Seems that global climate change is bringing about global change.”

. . .

8          “For the U.S., ‘Iraq’ is Arabic for ‘Vietnam’.  For Russia, ‘Syria’ may be Arabic for ‘Afghanistan’.”

7          “‘Waterloo’ is French for ‘Waterloo’.”

8          “Or Esperanto for ‘quagmire’.”

. . .

7          “We make decisions with limited information.  Look at who is for and who is against going to war.  Former General Wesley Clark suggests that the United States seeks to take out Iraq, Syria, Lebanon, Libya, Somalia, Sudan and Iran.  The Neo-conservatives in America want the United States to be mired in constant war everywhere on the planet all the time.  They keep getting us in trouble.”

8          “The bad folks.  Do they have even or odd numbers?  What color are their uniforms?”

. . .

7          “Much of the fighting is a prolonged currency war between the United States and many other countries.  The United States is slowly losing the franchise on the world’s reserve currency.”

. . .

[See the e-commentary at World’s Reserve Currency War I = Cold War 2.0 = WW III (?) (September 8, 2014) and Le Dollar – World’s Reserve Currency? (November 28, 2011).]

Bumper sticker of the week:

Are they doing the watusi when they should be doing the hokey pokey?