Archive for the World’s Reserve Currency Category

Another BRICS In The Wall? (August 28, 2023)

Posted in BRICS, Great Transition, World's Reserve Currency on August 28, 2023 by e-commentary.org

. . .

K          “A few more BRICS in the Wall?  Much if not most of the world is trying to erect a firewall to protect against US-led aggression and domination.”

J          “But no one really knows.  No one really cares.  It is not a topic at the water cooler or around the bar-b-que.  If I said BRICS, someone would think I was building a walkway.  A few stragglers may have some idea.”

. . .

K          “From the reports, Brazil, Russia, India, China and South Africa appear to be admitting the United Arab Emirates, Egypt, Iran, Saudi Arabia, Argentina and Ethiopia to the Club.  Look at the resources and population and land mass and other metrics.  Collectively, the Club will wield a much bigger club.”

. . .

K          “Seems to me that the most effective way to unite a group of folks with disparate goals and interests is to identify and demonize a common enemy especially one that is a true demon.”

J          “Seems to be a truism not just of politics but of human nature.  Overlooking internal divisions is easier with an outside divider threatening everyone.  That is at play and at work.”

. . .

K          “The United States does not have the individual talent or the talented institutions to recognize and adjust to changing realities.  The United States does not have the human capital in positions of power.  We are hosed.”

J          “Bummer.”

. . .

J          “The mess we are bequeathing to the kids is a real and an unreal and a surreal mess.  No one really knows, yet there are a few stragglers who do care and are concerned but cannot figure out how to manifest their care and concern.”

K          “Folks are restless and restive and not resting well.  Things are festering faster and percolating precipitously.”

. . .

[For an exuberant but perhaps exaggerated perspective on the Great Transition, see ‘Welcome to the BRICS 11’ by Pepe Escobar, the recipient of the Sixth Annual Pushitzer Prize In Commentary For 2021 (June 7, 2021), dated August 25, 2023 in “thecradle.co”]     

[See the e-commentary at Portentous Developments In 2022? (January 23, 2023),  The China-Russia Affair: Advancing The Petro-Yuan; Dictating The Future (March 26, 2018), World’s Reserve Currency War I = Cold War 2.0 = WW III (?) (September 8, 2014), AIIB: China: 1; U.S.A. 0? (April 6, 2015), The Mandibles, FRNs, SDRs, IMF, G20, WTD! (September 5, 2016), USA + FRN/PD — > IMF + SDR — > NDB + UMU? The “Universal Monetary Unit” . . . Coming To a Planet Near You (January 2, 2017) and One World Currency? (January 8, 2018).]

Bumper stickers of the week:

There is a disturbance in the force

There is a disturbance in the farce

Multipolarity – Coming to a planet near you

Dragon < Eagle > Bruin; Dragon + Bruin > Eagle; Eagle + Bruin > Dragon

Bummer

World War E / World War III Is 1 [9?] Year[s] Old This Week.  Oh, And Happy Presidents’ Day! (February 20, 2023)

Posted in China, Dollar - World's Reserve Currency, Petrodollar, Russia, Ukraine, War, World War E, World War III, World's Reserve Currency on February 20, 2023 by e-commentary.org

. . .

J          “Putin is desperate.”

K          “Biden is desperate.  The speakers yesterday proclaimed a word that has almost been expunged from the American lexicon – peace.  And look at his latest desperate theatrical antic.  The puppet flies to meet the marionette.”

. . .

K          “Russia is subtly and methodically winning the ‘economic war’ and is slowly and patiently winning the ‘kinetic war’ and ceaselessly and unrelentingly losing the ‘propaganda war’ . . . at this time.  The unprovoked Western sanctions are destructive and counterproductive.  The truth is emerging.  The West is very, very slowly unraveling.”

J          “The West will prevail.”

. . .

K          “One of the tectonic shifts on the journey from illusionment to disillusionment was the gradual realization that the United States of America since 1945 was not the world’s policeman as I was directed in grammar school . . . it is the world’s bully.  After that realization was confirmed by a thousand historical footnotes, nothing is or can ever be the same.”

J          “Policemen need to be bullies at times.”

. . .

K          “The bourse is the battlefield; the battlefield is the bourse.  The PetroDollar is supported by violence; the violence is funded by the PetroDollar.  The de-dollarization efforts may not dethrone the PetroDollar, but little by little they are moving the PetroDollar to a highchair at a table with other currencies.”

J          “Some two-party commercial transactions are being undertaken without the PetroDollar.  However, the PetroDollar still has a long shelf life and a long half-life.  For better and for worse.” 

. . .   

K          “Biden will instigate a false flag event to go nuclear.”

J          “Putin will instigate a false flag event to go nuclear.”

. . .

K          “Biden’s war is not going to end well.”

J          “Putin’s war is not going to end well.”

. . .

[See the e-commentary at Portentous Developments In 2022? (January 23, 2023), Washington Wants War In The Worst Way:  Dust Off The IOSAT Or Return To The Status Quo Ante Bellum? (January 24, 2022), N. Propaganda R. Transcribed:  “Get Vaccinated.  Attack Russia.”  Oh, And Happy Presidents’ Day! (February 21, 2022), The Cuban Missile Crisis And The Monroe Doctrine Today (February 28, 2022), Sanctions, Supply Chains And World War E (March 7, 2022), World War E Breeds Bretton Woods III;  BW II And The PetroDollar Will RIP? (March 14, 2022) (“The ‘PetroDollar’ has had as much influence on civilization as the implementation of the wheel, the creation of the printing press and the discovery of electricity.  Yet, the ‘PetroDollar’ and BW II are dying a slow but accelerating death.  In a stupendous irony, U.S. stupidly killed BW II which had served it so well and has now spawned an uncertain BW III.”), The War Between The Nation-States:  Architectonic And Tectonic Shifts In The World:  Getting Our Bearings In The Emerging World Order: Land And People And Resources Versus Fiat And Finance And Firearms (August 15, 2022), The U.S. Declares War On Germany, Europe, Russia And The Free World . . . Bank Of England Flops Then Flips . . . And The Supreme Beings Saunter Into Town (October 3, 2022), What Is With Our Friend Sweden And Our Friends The Swedes?  The Swedish Central Bankers Reward One Of Their Criminal Home Boys:  Bernanke.  The “Real” Nobel For Peace (War?) Rewards Hypocrisy And Dishonesty.  The Nord Stream Pipeline Terrorism Investigation Is Dodgy. (October 24, 2022), Existential Threat + Existential Threat = World War.  Are We Mired In World War E[conomic] / World War III? (November 21, 2022), The China-Russia Affair: Advancing The Petro-Yuan; Dictating The Future (March 26, 2018), World’s Reserve Currency War I = Cold War 2.0 = WW III (?) (September 8, 2014), AIIB: China: 1; U.S.A. 0? (April 6, 2015), The Mandibles, FRNs, SDRs, IMF, G20, WTD! (September 5, 2016), USA + FRN/PD — > IMF + SDR — > NDB + UMU? The “Universal Monetary Unit” . . . Coming To a Planet Near You (January 2, 2017), One World Currency? (January 8, 2018), and two prescient pieces on NATO at NATO: Nations Aggressively Taking Over (March 31, 2014) (“If Bush can invade Iraq without any good reason, can Putin invade Ukraine without any good reason?”) and NATOExit? NATOExeunt? (July 4, 2016).]

It is going nuclear.

Bumper stickers of the week:

“The other thing I will say is that the war didn’t start in February last year.  The war started in 2014.  And since 2014, NATO Allies have provided support to Ukraine, with training, with equipment, so the Ukrainian Armed Forces were much stronger in 2022, than they were in 2020, and 2014.  And of course, that made a huge difference when President Putin decided to attack Ukraine.”  NATO Secretary General Jens Stoltenberg

“They’ve lost strategically, they’ve lost operationally and, I repeat, they’ve lost tactically.  . . .  What they’ve tried to do, they’ve failed at.  The strategic reframing of their objectives, of their illegal invasion, have all failed, every single one of them.”  Chairman of the Joint Chiefs of Staff General Mark A. Milley

Desperate people do desperate things

“It is dangerous to be right in matters on which the established authorities are wrong.”  Voltaire

Dragon < Eagle > Bruin; Dragon + Bruin > Eagle; Eagle + Bruin > Dragon

The Cuban Missile Crisis And The Monroe Doctrine Today (February 28, 2022)

Posted in China, CIPS, Currency, Gold, MIC, MICAC, Money, Neoconservatives, Petrodollar, Russia, Sanctions, SPFS, SWIFT, War, World's Reserve Currency on February 28, 2022 by e-commentary.org

. . .

K          “America failed.”

J          “Russia failed.”

. . .

K          “The American Foreign Policy Effete pushed with both hands to goad, badger, harass, disrespect and humiliate Russia and circumvent and undercut any reasonable and peaceful resolution.  They have blood on those hands.  They intentionally provoked Russia and cynically sacrificed Ukraine.” 

J          “Russia invaded.  Putin is a thug, a bully, a criminal and a psychopath.  Russia and Putin are responsible.”

. . .

K          “Let the record reflect that the U.S. decided to deploy nuclear weapons first.  The SWIFT system should be isolated from politics and serve as the neutral financial infrastructure for the world.  The U.S. weaponized SWIFT and cut off Russia’s ‘financial e-mail’ from the world.  Wait until the dimwits discover that Russian financial interests cannot be surgically excised from the world financial community without creating potentially cascading contagion.”

. . .

K          “If China and Russia agree to use the CIPS or the SPFS or some amalgam of the two, they can expand their efforts to circumvent the SWIFT.  The financial infrastructure is the ‘pipe’ and at this time PetroDollars are the ‘flow’ which could become superfluous if everyone is not forced to use the pipe.  And then America becomes Bulgaria.”

. . .

K          “What if Russia proclaimed that 1,000,000 Rubles can be exchanged for one ounce of gold.  And one ounce of gold can be exchanged for 1,000,000 Rubles.  Let the market respond.” 

. . .

K          “The U.S. decision to declare ‘World War E’ as they say could descend into World War Three.  The U.S. refuses to abide by a rules-based international system and instead does whatever it wants to do.  Russia may have declared war on Ukraine by default; the U.S. declared war on Russia and the world by design.”

. . .

K          “Don’t forget that when you have someone trapped in a corner, you are also in the same corner.”

. . .

K          “America no longer produces intellectuals.  Except for [Stephen F.] Cohen and [John J.] Mearsheimer and a few others [Michael Brenner], the American Foreign Policy Effete advances its own private, personal and professional interests even when those are contrary to America’s best interests.  They are treasonous.”

. . .

K          “Life presents many insoluble situations.  This was soluble.  This is the Cuban Missile Crisis played out in Eurasia rather than North America three score years later.  This is the Monroe Doctrine advanced in another region.  The solution was simple and obvious.  And remember that genius is simple and obvious.”

J          “Putin invaded.  Period.”

. . .

J          “China?  China owns the U.S.  Lock, stock and sinker.  Hook, line and barrel.”

K          “Okay, so we really do agree quite often.  What is the U.S. thinking when it antagonizes a country that should be neutralized and neutral and self-destructively drives that country closer to China.  Everyone should agree to leave Ukraine as a neutral buffer with NATO returning to the original borders.  Let’s focus on the real problem.”

J          “I know I am.  I am learning Mandarin so that I can interpret the conversations of the prison guards at the re-education camp.”

K          “This undertaking in Ukraine is a beta test for China.  They are taking notes.  When you are done with them, send over a few of the language tapes.” 

. . .

J          “Putin’s War.”

K          “Biden’s War.”

. . .

[See “Experts Warned For Years That NATO Expansion Would Lead To This” dated February 25, 2022 by Caitlin Johnstone, the recipient of the Fourth Annual Pushitzer Prize In Commentary For 2019 (April 15, 2019), in www.caitlinjohnstone.com and also the articles in Consortium News.]

[See the e-commentary at Cuba – October, 1962 (October 22, 2012), Washington Wants War In The Worst Way:  Dust Off The IOSAT Or Return To The Status Quo Ante Bellum? (January 24, 2022), Dragon < Eagle > Bruin; Dragon + Bruin > Eagle (April 19, 2021), Sanctions:  Stupid, Absurd, Futile?  Oh, And Happy Armistice Day / Remembrance Day / Veterans Day! (November 11, 2019) and The China-Russia Affair: Advancing The Petro-Yuan; Dictating The Future (March 26, 2018).]

Bumper stickers of the week:

Putin’s War

Biden’s War

Stop War: Stop Putin

Stop War: Stop Biden

I like J

I like K

Dragon < Eagle > Bruin; Dragon + Bruin > Eagle

Sanctions:  Stupid, Absurd, Futile?  Oh, And Happy Armistice Day / Remembrance Day / Veterans Day! (November 11, 2019)

Posted in Sanctions, SWIFT, World's Reserve Currency on November 11, 2019 by e-commentary.org

. . .

J          “But stupidity, absurdity and futility may be the unwitting goals.  Or they may not even have a goal.”

K          “Or an idea.”

. . .

K          “At least sanctions have the saving grace of not being more bombing and more killing and more killing and more bombing and more bombing and more killing.”

J          “They are considered tools of diplomacy rather than weapons of war.  However, I am not so sure whether they are not ineffective as tools of diplomacy yet very effective in instigating war.”

. . .

K          “Sanctions imposed on a country unite the country against a common threat and accelerate the drive to be independent of the good or service being withheld.  Denying a people things ranging from exotic fromage to the esoteric internet financial infrastructure to handle business transactions becomes the mother of invention.”

J          “And in the intermediate term, the sanctioned people become more independent and much stronger.”

. . .

K          “Far too many of the sanctions imposed by the United States are illegal under national and international law, weaponize the U.S.’s control of the world’s reserve currency, and/or are simply counterproductive and invite blowback.”

J          “There will be blowback.”

. . .

[See the e-commentary including the discussion of sanctions at “‘Grexit’, ‘GrexEUnt’, Percolating Problems:  PIIGS, BRICS, EU, EC, ECB, IMF, NATO, WTO, WAR (February 23, 2015)”, a discussion of SWIFT and other topics at “The China-Russia Affair: Advancing The Petro-Yuan; Dictating The Future (March 26, 2018)” and “World’s Reserve Currency War I = Cold War 2.0 = WW III (?) (September 8, 2014)”.]

Bumper stickers of the week:

“That which does not kill me only makes me stronger.”  Nietzsche

“The real power in America is held by a fast-emerging new Oligarchy of pimps and preachers who see no need for Democracy or fairness or even trees, except maybe the ones in their own yards, and they don’t mind admitting it.  They worship money and power and death.  Their ideal solution to all the nation’s problems would be another 100 Year War.”  Hunter S. Thompson

The China-Russia Affair: Advancing The Petro-Yuan; Dictating The Future (March 26, 2018)

Posted in AIIB, China, CIPS, Cryptocurrency, Currency, Cyberactivities, Gold, Guns, INE, International Finance, International Monetary Fund, Money, Russia, SDR - Special Drawing Rights, Second Amendment, Silver, Special Drawing Rights (SDR), Sports, SWIFT, World's Reserve Currency on March 26, 2018 by e-commentary.org

. . .

K          “In the past, the United States played and promoted with some skill the tension and animosity between China and Russia.  The United States has behaved so abysmally and monstrously that even the Chinese and the Russians are flirting with each other.”

J          “The enemy of my enemy is my friend.  Yet nations do not have enemies or friends, only interests.  They have allied to advance their common interests in confronting a common enemy.”

K          “When the United States drives the Chinese and Russians to embrace and play well together, the U.S. is in trouble.”

J          “The U.S. has proudly and defiantly positioned itself to be the world’s worst enemy.”

. . .

J          “The National Security Strategy document signed by President Trumpi on December 18 unwisely exacerbates the U.S. and China-Russia divide and further alienates the U.S. from the world.” 

K          “China is launching its crude oil futures contract today at the Shanghai International Energy Exchange (INE).  China and Russia have been swiftly designing and perfecting a system described as the China Interbank Payment System (CIPS) to send and receive information about and to reconcile financial transactions.  The system will circumvent and ultimately undermine the Society for Worldwide Interbank Financial Telecommunication (SWIFT) controlled by the U.S.”

J          “They are also establishing the Petro-Yuan to replace the Petro-Dollar to facilitate transactions facilitated by the CIPS and to make investments funded by the Asia Infrastructure Investment Bank (AIIB).  That allows the Chinese and Russians, at the time of their choosing, to dump U.S. Treasuries and equities and buy up and demand the physical delivery of all gold and silver.  The Big Jolt will shift the geopolitical tectonic plates in a short time.”

K          “The U.S. will respond by dropping every bomb in its arsenal all at once everywhere and assassinating any leaders who challenge its hegemony.”

. . .

K          “The Chinese are building the One Belt One Road Initiative and uniting countries and continents, but the U.S. has a hard time tightening its economic belt and fixing one road.”

. . .

K          “The U.S. could do a whole lot more to slow or stop the wholesale theft of intellectual property by China.”

J          “His company was uneasy about filling the order from China for just a single unit.  Three years later, they discovered that an entire plant is producing dozens of them daily.”

K          “Now they do not even need to reverse engineer a product.  Just hack the computer and download the plans.”

J          “When Chinese technology was used to commandeer an American drone, I knew the situation was bleak.”

. . .

J          “A few weeks ago, someone on a lunch break called into a radio call-in show and questioned the genius of the U.S. strategy.”

K          “At some point, everyone will be calling in and asking why the prices at Walmart are suddenly what they were at Nordstroms the previous month.”

. . .

J          “The rest of the world may accept or be forced to accept a gold-backed currency for some time.  However, after securing control, the Sino-Russian Alliance will be free to impose a fiat cryptocurrency using something much more sophisticated than the rudimentary blockchain technology and perhaps a refined version of the Hashgraph technology.”

K          “But will the U.S. have enough bombs to drop on the rest of the world?”

. . .

K          “The Chinese and the Russians were playing chess and the U.S. was playing checkers; now the Sino-Russian Alliance is playing weiqi and Trumpi is playing tiddlywinks.”

J          “Trumpi is playing with himself and playing with our futures.  And they are playing doubles while the U.S. is playing singles.” 

. . .

[See “China plans to break petrodollar stranglehold” in “Asia Times” by Pepe Escobar dated December 21, 2017 and “The World Will Not Mourn The Decline of U.S. Hegemony” in “Truthdig” by Paul Street dated February 20, 2018.]

[See the e-commentary titled “World’s Reserve Currency War I = Cold War 2.0 = WW III (?) (September 8, 2014)”, “AIIB: China: 1; U.S.A. 0? (April 6, 2015)”, “The Mandibles, FRNs, SDRs, IMF, G20, WTD! (September 5, 2016)”, “USA + FRN/PD — > IMF + SDR — > NDB + UMU? The “Universal Monetary Unit” . . . Coming To a Planet Near You (January 2, 2017)” and “One World Currency? (January 8, 2018)”.]

Bumper stickers of the week:

Panda < Eagle > Bruin; Panda + Bruin > Eagle  

CIPS > SWIFT; AIIB > World Bank; INE > Brent + WTI; Petro-Yuan > Petro-Dollar:  [ergo] -> Panda + Bruin > Eagle.  Game, Set, Match.  Fin.

Currency Wars -> Trade Wars -> War Wars

America First -> American Last

Some signs at the “March For Our Lives” March on March 24:

Orange lies matter

Owner for reform

The scariest part of school should be a pop quiz

More 4.0 Less 5.56

We call BS

Hold handguns

When I grow up, I want to be alive

If I am killed by a gun, don’t bury me, just dump my body on the Capitol steps

Bullets are not school supplies

Enough / Bastante

My life is worth more than your guns

No more silence  End gun violence

Arm me with books not bullets

Need test to drive  Why not to shoot?

Protect kids not guns

Moms demand attention

Am I next?

Gun owner for gun control

No Rational Argument

21st century technology, 18th century laws

Too old to create change, step aside and we’ll do it

Never again

Some tweet  We march

NRA  Modern Day Mafia

Mental health not personal wealth

Respect our existence or expect our resistance

Thoughts Prayers Action

My students are more important than your guns

Enough is Enough

Mothers Against the NRA

#NeverAgain

One World Currency? (January 8, 2018)

Posted in Banks and Banking System, Cryptocurrency, Currency, Cyberactivities, Dollar - World's Reserve Currency, Magazine Reference, Money, Petrodollar, Special Drawing Rights (SDR), Universal Monetary Unit, World's Reserve Currency on January 8, 2018 by e-commentary.org

. . .

K          “Thirty years ago tomorrow, The Economist magazine uploaded an article titled ‘Get Ready for the Phoenix’ with a cover proclaiming ‘Get ready for a world currency’ and featuring a rising Phoenix.”

J          “Get ready.  The Phoenix, the Bancor, the S.D.R., the Universal Monetary Unit, the Bobcoin, the Something Else is likely to replace the PetroDollar in the near future.  Stay tuned.” 

. . .

K          “On a simple level, ‘cryptocurrencies’, etc. are digital and gold, etc. is analog.  Blockchain technology underlying ‘cryptocurrencies’ is likely to be supplanted by a fast, fair, sustainable, scalable, guaranteed Byzantine fault tolerant consensus digital technology using gossip protocols and virtual votes such as Hashgraph.  And Hashgraph is likely to be supplanted by even more advanced and sophisticated technologies.” 

J          “That’s what everyone is saying.  Get ready.  Stay tuned.”

. . .

[See a related and more recent article “One world, one money” in The Economist magazine dated September 24, 1998.  First published as a five-part series punctuated with reprints of paintings by Gustave Courbet, “Bitcoin Doesn’t Exist – The Full Story” written by “Dr. D” for “The Automatic Earth” project/site provides some perspective on the phenomenon known as ‘cryptocurrencies’.  The comments to the series and the comments on the sites that reprint the series provide some robust ideas and opinions.  Much is happening quickly.]

[See the e-commentary titled “‘Bitcoin’, ‘Ethereum’ . . . ‘Blockchain Technology’  Say What? (July 3, 2017)”, “The Mandibles, FRNs, SDRs, IMF, G20, WTD! (September 5, 2016)” and “USA + FRN/PD — > IMF + SDR — > NDB + UMU? The “Universal Monetary Unit” . . . Coming To a Planet Near You (January 2, 2017)”.]

Bumper stickers of the week:

Want to improve your love life?  Change your handle to “Blockchain”

. . .

The Economist, January 9, 1988, Vol. 306, pages 9-10; Cover:  “Get ready for a world currency”; Title of the article:  “Get Ready for the Phoenix”

THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency.  Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix.  The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.

. . .

At the beginning of 1988 this appears an outlandish prediction.  Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987.  The governments of the big economies tried to move an inch or two towards a more managed system of exchange rates – a logical preliminary, it might seem, to radical monetary reform.  For lack of co-operation in their underlying economic policies they bungled it horribly, and provoked the rise in interest rates that brought on the stock market crash of October.  These events have chastened exchange-rate reformers.  The market crash taught them that the pretence of policy co-operation can be worse than nothing, and that until real co-operation is feasible (i.e., until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.

. . .

The new world economy

The biggest change in the world economy since the early 1970’s is that flows of money have replaced trade in goods as the force that drives exchange rates.  As a result of the relentless integration of the world’s financial markets, differences in national economic policies can disturb interest rates (or expectations of future interest rates) only slightly, yet still call forth huge transfers of financial assets from one country to another.  These transfers swamp the flow of trade revenues in their effect on the demand and supply for different currencies, and hence in their effect on exchange rates.  As telecommunications technology continues to advance, these transactions will be cheaper and faster still.  With unco-ordinated economic policies, currencies can get only more volatile.

. . .

In all these ways national economic boundaries are slowly dissolving.  As the trend continues, the appeal of a currency union across at least the main industrial countries will seem irresistible to everybody except foreign-exchange traders and governments.  In the phoenix zone, economic adjustment to shifts in relative prices would happen smoothly and automatically, rather as it does today between different regions within large economies (a brief on pages 74-75 explains how.)  The absence of all currency risk would spur trade, investment and employment.

. . .

The phoenix zone would impose tight constraints on national governments.  There would be no such thing, for instance, as a national monetary policy.  The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF.  The world inflation rate – and hence, within narrow margins, each national inflation rate – would be in its charge.  Each country could use taxes and public spending to offset temporary falls in demand, but it would have to borrow rather than print money to finance its budget deficit.  With no recourse to the inflation tax, governments and their creditors would be forced to judge their borrowing and lending plans more carefully than they do today.  This means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case.  Even in a world of more-or-less floating exchange rates, individual governments have seen their policy independence checked by an unfriendly outside world.

. . .

As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice.  They can go with the flow, or they can build barricades.  Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones.  It will mean allowing and then actively promoting the private-sector use of an international money alongside existing national monies.  That would let people vote with their wallets for the eventual move to full currency union.  The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today.  In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.

. . .

The alternative – to preserve policymaking autonomy – would involve a new proliferation of truly draconian controls on trade and capital flows.  This course offers governments a splendid time.  They could manage exchange-rate movements, deploy monetary and fiscal policy without inhibition, and tackle the resulting bursts of inflation with prices and incomes polices.  It is a growth-crippling prospect.  Pencil in the phoenix for around 2018, and welcome it when it comes.

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.