We have discussed the international monetary reform (RESET) many times and will continue to do so, and James Corbett is correct, THIS is very important in worldwide governance.
And once again I am concluding that the banksters think that war is the most effective incentive to enforce their policies. Russia, China, and other nations that have a spat with Washington’s Gunboat Diplomacy can bypass that U.S. dictate with the SDR. What a effective incentive to get most of the nations to adopt the new SDR for international trade (De-dollarization), and usher in the One World Currency!
But,it is all behind the scenes, as most citizens will not recognize a difference, other than the fluctuation in the value of their national currencies or in the cost of things.
As for when will the economic collapse occur, as you know since the 2008 crisis there was no recovery and no solution, the central banksters merely “kicked the can down the road”.
The market collapse will happen when the banksters decide to hit the Kill-switch, or if mass boycotts and bank runs disrupts corporate-government activity. As the debt will (eventually) be written off for the SIFIs, aka Too Big To Fail corporations, with a combination of bail-ins and debt write-offs.
Oh, and remember the important distinction with China’s currency. There are two versions of the Yuan as a currency, one is for domestic use and the other (the Renminbi, aka RMB) is for international use.
Thus, China has some rare options to the Liberalization policy mandates imposed upon governments.
Some researchers have called upon the U.S. to also issue a domestic dollar (from the Treasury dept, as opposed to the international controlled Federal Reserve System). ~Ron
Title: The Most Important Story You Didn’t See This Week
Video posted 01 Oct 2016
SDR World Order
by James Corbett corbettreport.com October 1, 2016
I’m not sure how to break this to you, but it appears the world is ending this weekend. Or at least that’s what you’d believe if you were reading certain corners of the internet.
As you may have already heard, the UN is “taking over the internet” this weekend. But as you’ve also heard if you follow The Corbett Report, that is a complete misrepresentation of what is really happening. Worse, hyperbole about a “UN takeover” of the internet obscures the real solution to ICANN and the centralized DNS system.
But there’s another “end-of-the-world” event taking place this weekend that you might not have picked up on: the SDR.
That’s right, the IMF is formally adding the Chinese renminbi (aka the yuan) to their “Special Drawing Rights” basket on Saturday, October 1st. The move boosts the yuan to the status of global reserve currency alongside its basketmates, the pound, the euro, the yen and the dollar. At 10.92% it will be the third highest-weighted currency in the basket, behind the euro at 30.93% and the dollar at 41.73%.
For those who missed my previous reporting on the SDR and the significance of the yuan’s inclusion, here’s the primer:
- The SDR is not a currency, but a potential claim on dollars, yen, euros, pounds, and now yuan.
- It is issued by the IMF and held (and traded) as a “supplementary reserve asset” by central banks.
- There are 204 billion SDRs outstanding, equivalent to $285 billion or about 2.5% of total global reserves.
The upshot of the SDR is that it provides liquidity for global transaction settlement in times when dollars and gold are in scarce supply. Inclusion of a currency in the SDR basket means that there is a built-in demand for that currency as central banks tend to match their currency holdings to the basket’s weighting, meaning that central bankers around the world are now (or have already) adjusted their aggregate holdings of yuan to about 10.92% of their portfolio. With $11.6 trillion of reserves globally, that equates to over $1 trillion worth of yuan being held in central bank coffers around the world.
More than that, the move is expected to boost investment in the yuan from both FX reserve managers and global portfolio managers. The FX inflows alone have been estimated at as much as $3 trillion in the coming years, with onshore bond buying accounting for a further $1 trillion of expected foreign investment.
Some outlets are hailing this as the largest transformation of the global monetary order since WWII.
Others, like Barron’s Chi Lo, are putting a wet blanket on that hyperbole. In an article titled “What Now for China as Renminbi Joins SDR?” Lo argues that much of the re-balancing of global reserve portfolios have already been completed, and would have only amounted to an extra $31 billion of demand for the yuan, a drop in the bucket of global liquidity. And global investors, he says, will not base their investment decisions on China’s SDR status, but on China’s commitment to the structural reforms which have been put on the back burner since the yuan achieved SDR status:
“SDR inclusion of the renminbi is not relevant to the portfolio re-balancing decision (to increase the weighting of renminbi-denominated assets) of international investors. The impact on global portfolio decisions will come from foreign investors’ assessment of China’s fundamental outlook, the opening of China’s capital account and the decision by international index providers, such as MSCI, to include Chinese A-shares in their global indices.”
So who’s right? Is this the dawn of a new monetary order, or a blip of little significance in and of itself? Well, in a weird way perhaps both are right. China’s SDR inclusion is not going to turn the world upside-down overnight. And if it was just the inclusion of one more currency in the global reserve basket (and only 10% of the basket at that), then this wouldn’t be significant all by itself. But while you were sleeping another development came along that gestures to the potentially transformative nature of this SDR makeover.
In August the World Bank announced to relatively little fanfare an historic bond issue: The International Bank for Reconstruction and Development (IRBD), one of the five institutions under the World Bank umbrella, would sell nearly $3 billion worth of SDR-denominated bonds. And the currency of settlement? The Chinese yuan.
SDR-denominated bonds were flirted with decades ago, most recently in 1981, but the market for SDR bonds did not develop and they soon went the way of the dodo. But now, lo and behold, 35 years later they’re making a comeback, right in the heart of the world’s rising economic dragon.
The issue, which went ahead on August 31st, serves a mundane, practical purpose: It allows Chinese investors to dabble in different currency assets without investing abroad. But at the same time it serves a much bigger purpose. In attempting to revive the long-dormant SDR bond market, China is tacitly backing the SDR as a reserve currency unto itself. Not a mere claim that is redeemed in other currencies by central banks in need of liquidity, but a settlement currency in and of itself.
As I explained before, this has been Beijing’s plan since the 2009 crisis: not to have the yuan replace the dollar as the global reserve, but to have the SDR replace the dollar. This allows the Chinese government to avoid having to liberalize the yuan or ease up on its rigid capital controls, but still gives it a seat at the table in a new global monetary order while simultaneously dethroning their best frenemy, the US. It’s win-win-win for China and, more importantly, win-win-win for the globalist oligarchs who want to bring in a New World Order of globally-administered currency.
As The Epoch Times puts it: “This is the first step toward one world currency.”
And guess what? It’s been in the planning for years, openly discussed in the central bankers’ white papers, decision documents and conferences, but conveniently unreported by the media and completely overlooked by the public.
In March 2009, as the world was still reeling from the Global Financial Collapse, Zhou Xiaochuan, the Governor of the People’s Bank of China, published an essay on March 23, 2009 in an essay bluntly titled “Reform the international monetary system.” In it, he argued that the world could no longer afford to be tied to the US dollar and the vagaries of the American financial system. Instead, it needed to be presided over by those trustworthy angels at the IMF:
“Compared with separate management of reserves by individual countries, the centralized management of part of the global reserve by a trustworthy international institution with a reasonable return to encourage participation will be more effective in deterring speculation and stabilizing financial markets. The participating countries can also save some reserve for domestic development and economic growth. With its universal membership, its unique mandate of maintaining monetary and financial stability, and as an international ‘supervisor’ on the macroeconomic policies of its member countries, the IMF, equipped with its expertise, is endowed with a natural advantage to act as the manager of its member countries’ reserves.”
And in case that wasn’t clear enough, Zhou also wrote that: “The SDR has the features and potential to act as a super-sovereign reserve currency.”
The very next year the Bank for International Settlements (yes, that Bank for International Settlements), the European Central Bank and the World Bank jointly organized the Third Public Investors Conference, a chance for 80 central bankers, wealth fund and pension fund managers to hobnob at the BIS’ headquarters in Basel and discuss their world domination schemes. The results of that conference were collected in an edition of “BIS Papers” and published on the BIS website. One of those papers, penned by George Hoguet and Solomon Tadesse of State Street Global Advisors, discussed “The role of SDR-denominated securities in official and private portfolios” and predictably pimped the revival of SDR bonds that we are currently living through:
“An investor can synthetically replicate the weights of an SDR-denominated bond, but a security denominated in SDRs is self-rebalancing and is likely to minimize rebalancing costs. Additional research, particularly on the coordination problem (which limits liquidity) and operational issues, including settlement, can facilitate the development of an SDR-denominated bond market. Williamson (2009a) suggests that greater private use of the SDR could possibly facilitate greater official use, including the pegging of currencies to the SDR rather than to a basket of currencies or to some bilateral exchange rate.”
In other words, SDR bonds create the market for SDRs generally and legitimate their use as a settlement currency in their own right.
Now, six years later, here we are with the World Bank helping China issue SDR-denominated bonds. This is the real reason that this bond issue is happening at all. As The Epoch Times points out: “For the IBRD, there is no advantage because it is borrowing in strong currencies and getting paid in a relatively weak one.”
No, this is not about some wonderful new way for the World Bank to cheaply finance its bond issues; it is entirely about legitimizing the role of the SDR on the world stage as a potential world currency.
It remains to be seen whether this strategy will be successful. The first bond issue was a success, with a bid to cover ratio of 2.5 and 50 institutional investors—from central banks to domestic banks, brokerages and insurance companies—bidding on the instruments. But ZeroHedge quotes a fixed-income fund manager in Hong Kong who was not so impressed by the auction: “We are not interested in SDR bonds and we can’t see why Chinese investors should want these bonds since they can easily buy much higher yielding bonds in China.”
Whether SDR bonds will take off depends completely on whether the central bankers can convince the financial world of the benefits of scuttling the dollar reserve system. That will take some concerted effort, which is why we should expect to see an increase in stories raising awareness about SDRs and their potential utility in the coming years.
In that sense, the spate of stories this weekend about the yuan’s SDR inclusion may not be so much the end of the world as the first wave of propaganda getting people ready for the end of the world.
Washington Consensus Was King Dollar, New Consensus Is De-Dollarization
The above headline is a bit lacking on the details. De-dollarization does not mean the immediate end to the Federal Reserve Note (U.S. Dollar), but rather a less powerful currency in international commerce. That is, “if” the central banksters manage a soft landing when they announce their engineered emergency.
Will the emerging markets embrace the SDR for bills of exchange in world trade?
Seeing how massive the Asian markets are it may be inevitable as China alone can dictate this trend with export/import payment demands, then there are nations that Washington has sanctioned or made harsh demands via gunboat diplomacy, such as Venezuela, Iran, Russia et al…
Title: The Biggest Monetary Transformation Since WWII
Video posted 27 Sep 2016
More Reasons Governments May Insist on Settling Trade In RMB (SDR bonds) rather than the USDollar:
Title: The People of the Philippines take to the street to remove america’s tyranny strangle hold
Video posted 16 Sep 2016
Title: Saudi Arabia collapse, egypt admit to ISIS is creation of US
Video posted 22 Sep 2016
Title: South Sudan Faces Hyper-Inflation – Economy In Ruins
Video posted 18 Sep 2016
Title: China Joining Russia In Syria While Germany Prepares to Leave NATO-WW III Is Here
Video posted 27 Sep 2016
Title: RMB’s SDR inclusion revs up globalization
Video posted 01 Oct 2016
The Ruling Elite Are Addicted To Handouts From The Venture Capital of the Warfare/Welfare State for central planners
Central Banks Are Like A Herd Of Elephants Trying To Hide…
And talking about hiding – The Shadows have a covert operation unit known as the Exchange Stabilization Fund (ESF) within the U.S. Treasury Department created in 1934.
Title: ESF~ Exchange Stabilization Fund
Title: David Stockman: America Now Lives Under A ‘Perverted Regime’
Video posted 02 Oct 2016
Officials and Executives say Don’t Blame Banking – NEVER Blame The Slave Masters For Your Enslavement!
Title: Shipping in Crisis!
Video posted 02 Mar 2016
Title: Megatrend #9 – Huge Changes to the Banking System!
Video posted 8 Sep 2016
Title: MACRO ANALYTICS – 09-29-16 – Deutsche Bank & Signs of Panic! – w/John Rubino
Video posted 02 Oct 2016
Title: The Scramble To Save Deutsche Bank – Propping Up A Zombified Bank
Video posted 30 Sep 2016
Title: Top Bankers Threaten To Leave London After Brexit – But Why Don’t They Leave Earth?
Video posted 30 Sep 2016
Title:Top Bank In Canada ATM Cards Just Went Dark.
Video posted 2 Oct 2016
Ruling Elite Exerting Control:
She is dictating new laws and suspending future elections…
Hmm… Iraqis and Syrians can’t be happy with Turkey about that!
Title: Transpicuous News: Everything else they didn’t’ report on this weekend!
Video posted 2 Oct 2016
Title: HSBC Issues Red Alert, Warning of a ‘Severe Fall’ In the Stock Market
Video posted 13 Oct 2016