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Thread: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dollar

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    Is Russia Preparing to Move to the Gold Standard?

    ゥ Sputnik/ Ramil Sitdikov
    Opinion(updated 16:15 09.02.2015)
    8508563

    An article by Mises Institute contributor Marcia Christoff-Kurapovna believes that now is the ideal time for Russia to introduce a gold-backed ruble.

    Mises Institute contributor Marcia Christoff-Kurapovna believes that Russia may be in the process of planning for the introduction of a gold-based currency, and would be better off for it.

    "Though a far-fetched idea at first glance, many factors suggest that remonetization in gold may be a logical next step for Moscow," Christoff-Kurapovna notes in an analytical article published Friday on the libertarian think tank's website.

    The columnist notes that several factors may play into the decision, including Russia's recent partial detachment from Western economic and financial structures, sanctions, the ruble's devaluation and economic decline.


    ゥ Sputnik/ Oleg Lastochkin
    Belgium Reportedly Plans to Retrieve 200 Tons of Gold From UK Storages

    She further explains that even before the sharpening of relations between Russia and the West, economists close to Vladimir Putin have for years "been expressing [Russia's] unwillingness to remain at the monetary mercy of the US and its NATO allies," among them Sergei Glazyev, economic advisor to the president, and political ally to Deputy Premier Dmitri Rogozin. Christoff-Kurapovna also points out that despite the ruble's dramatic decline at the end of 2014, Russian economists rejected the idea of selling off gold reserves to prop up the currency, and on the contrary continued a heavily publicized purchase of gold. Christoff-Kurapovna attributes this to a keen awareness of the past lack of success among European countries including Britain, France, Italy and Spain in propping up their economies via the selling off of reserves.

    The expert argues that "while the Russian economy is structurally weak, enough of the country's monetary fundamentals are sound, such that the timing of a move to gold, geopolitically and domestically, may be ideal." The expert echoes commentary made by Russian economists and financiers, including recently by Central Bank Head Elvira Nabiullina, namely, that Russia's debt to GDP ratio is low (equivalent to $478 billion in a $2 trillion economy), with most of its external debt in private hands, which has also declined by $100 billion, and with a budget deficit projected at less than 1 percent of GDP.

    Low Oil Prices Only Increase Gold's Attractiveness

    Christoff-Kurapovna believes that as long as Russia continues to be a resource-based economy, its dependence on energy sector exports will play a negative role on currency stability. As a result, she argues, "only a move to gold, arguably, can make the currency stronger, even if it does limit Russia's available currency. In buying as much gold as it has, the country is, in part, ensuring that it will have enough money in circulation in the event of such fundamental transformation."

    Pointing out the potential benefits of the switch, the columnist argues that a gold-backed currency would turn the ruble into a more respectable world currency, while also making Russia "a more reliable and trustworthy trading partner."


    ゥ Sputnik/ Pavel Lisitsyn
    Gold, Silver Dip on Upbeat News From Greece and China

    More ominously, for the established order, a gold-standard-based ruble would "above all…mean the first major schism in the world's monetary order." If China follows Russia's lead, which Christoff-Kurapovna believes is likely, "it could mean the threat of a severe inflation in the United States should rafts of unwanted dollars make their way back across the Atlantic — the [Federal Reserve's] ultimate nightmare." In her article, the columnist cites bullion exchange expert Alisdair MacLeod, who notes that Russia and China would "hold all the aces" if they moved "the currency war away from the foreign exchanges and into the physical gold market," especially in light of the current low demand for physical gold in Western capital markets. The expert points out that last month, the Shanghai Gold Exchange and the World Gold Council concluded a deal aimed at expanding the Chinese gold market via the Shanghai Free Trade Zone.

    As far back as December, Macleod told CNBC that "there is no doubt that Russia and China, plus the other Eurasian states in their sphere of influence [such as Kazakhstan], are all accumulating gold and the indications are they see it as central to replacing the US dollar for cross border trade." Macleod noted that "it is already in Russia's interest to cast itself off from inflating western currencies and to base their economy on sound money, aka gold."

    A Warning to the Wise…

    Christoff-Kurapovna points out that the transition to the gold standard would not be easy for Russia: "As a pro-gold stance is, essentially, anti-dollar, speculation about how the US would react raises the question of whether an all-out currency war would follow. The West would have to keep Russia regionally and militarily marginalized, not to mention kept within the confines of the Fed, the ECB, and the Bank of England (BOE)."

    Broaching the subject of Russia's possible switch to the gold standard, KavPolit.com columnist Evgeni Lihachev noted recently that even Russia's moves to shift its reserves to non-dollar-based assets and to trade energy resources in ruble-denominated valuations have been viewed with hostility by Washington. An attempt to transition to a gold reserve would be much more serious, Lihachev says, explaining that "the fates of [Iraq's Saddam] Hussein and [Libya's Muammar] Gaddafi in these matters serving as a litmus test." Many Russian geopolitics and economics experts are convinced that the 2011 Western military campaign against Gaddafi was related directly to the latter's plans to stop selling oil in US dollars and to introduce a gold-backed regional currency which would have devastated Western fiat currencies. The earlier invasion of Iraq is similarly believed to be linked to the country's move toward independence from the dollar. Lihachev points out that the United States cannot "act like in Iraq and Libya in relation to Russia…and those measures which it could take it have already been taken."

    In light of China's continued agreement to ruble denominated gas contracts, Lihachev notes that "one gets the feeling that China knows more than they let on." The expert further notes that "this is indirectly confirmed by the almost synchronous launch by Russia, China and Kazakhstan in actively buying physical gold for national reserves." Ultimately, Lihachev notes that "of course, we still have a long way to go to reach the 'official gold reserves' held by the US, but in the event of a transition to the gold standard, what is important is not so much the amount of gold as the ratio of the reserves to the money supply."

    Russia's gold reserves are now estimated to be the world's sixth largest, comprising over 1,200 tons as of February 2015. The country purchased a record 152 tons of the precious metal over the course of 2014, including 20.7 tons in December alone, Russia's purchases amounting to nearly a third of total world central bank purchases, according to the World Gold Council. Russian experts have also suggested that unofficial purchases made by the Russian and Chinese governments may have been even higher. The two countries also have a favorable position in global gold production, Russia mining 272 tons of gold in 2014, while China produced a whopping 465 tons, making the two countries the top two producers globally.

    In a bid to counter gold-rush sentiment among both the Russian government and Russian citizens, Former advisor to the Chairman of the Central Bank, financial Obudsman Pavel Medvedev recently told Russia's Svobodnaya Pressa that a gold-based currency is "absolutely impossible" for Russia or for any other country in the world, due to the precious metal's limited supply. He noted that the modern economy needs far more financial liquidity than a gold standard backed currency can provide. "In a word," he stated, "entering the gold standard is not possible –there is not enough gold to achieve it." It remains to be seen what the Russian leadership really thinks about the idea.

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    China may be ending dollar's hold on reserve currency as early as September

    Next: Europe cracking as Austria becomes newest country to force depositor bail-ins


    Chinese Yuan and U.S. dollars
    Photo by ChinaFotoPress/Getty Images
    On March 9, sources within China provided new information that validates that the Far Eastern economy is now ready to compete with, or even supplant, the dollar as the sole global reserve currency as early as September of this year. Having already completed a message interchange system that mirrors the same one in the West, the Chinese equivalent of SWIFT is now ready and is expected to be fully operational by the 3rd quarter of 2015, which will allow other nations to transact with the world's largest economy without the need to purchase dollars as a medium of exchange.

    Additionally, there has been a great deal of speculation over the past two years that China might back their currency with gold once they are fully ready to float it as a global reserve, with strong indications showing that at the very least, China will be calling for the use of international letters of credit or trade notes that are backed by gold to help stabilize transactions using this historical form of sound money.
    Today, we got proof that it is the second outcome that is about to prevail following a Reuters report that China's international payment system, known simply enough as China International Payment System (CIPS), which serves to process cross-border yuan transactions is ready, and may be launched as early as September or October.

    According to Reuters, the launch of the will remove one of the biggest hurdles to internationalizing the yuan and should greatly increase global usage of the Chinese currency by cutting transaction costs and processing times.

    It will also put the yuan on a more even footing with other major global currencies like the U.S. dollar, as CIPS is expected to use the same messaging format as other international payment systems, making transactions smoother.

    CIPS, which would be a worldwide payments superhighway for the yuan, will replace a patchwork of existing networks that make processing renminbi payments a more cumbersome process. – Zerohedge

    Less than a month ago, China's close partner in Eurasia, Russia, implemented and brought online their own SWIFT alternative after economic sanctions by the U.S. continued into their second year, and information was discovered that pointed towards the NSA monitoring all messages going through the Western controlled SWIFT system.

    Even without a complete global float of the Yuan through their own message interchange, China has grown over the past few years to achieve 9% of all global transactions using their national currency. And with dozens of swap lines already in place in banking systems around the world, as well as London banking centers now able to issue Yuan denominated bonds, nearly everything in the global financial system has been mirrored by China to allow them to compete with, or replace, the dollar's function as the reserve currency.

    The average lifespan for any purely fiat currency is around 30 years, with the dollar surpassing this by more than a decade due to its place as the global standard for trade and oil purchases. However, now that the world's financial system has become saturated with overwhelming debt, and most economies solidly entrenched in currency wars, the world is about ready for a return to sound money and a gold backed currency, which China may be providing to their trading partners within six months.



    China's international payments system ready, could launch by end-2015 - sources

    Mon Mar 9, 2015 6:37am EDT



    By Michelle Chen and Koh Gui Qing

    HONG KONG/BEIJING (Reuters) - China's long-awaited international payment system to process cross-border yuan transactions is ready, and may be launched as early as September or October, three sources with direct knowledge of the matter told Reuters.

    The launch of the China International Payment System (CIPS) will remove one of the biggest hurdles to internationalizing the yuan and should greatly increase global usage of the Chinese currency by cutting transaction costs and processing times.

    It will also put the yuan on a more even footing with other major global currencies like the U.S. dollar, as CIPS is expected to use the same messaging format as other international payment systems, making transactions smoother.

    CIPS, which would be a worldwide payments superhighway for the yuan CHN= CNY=CFXS, will replace a patchwork of existing networks that make processing renminbi payments a more cumbersome process.

    "The CIPS is ready now and China has selected 20 banks to do the testing, among which 13 banks are Chinese banks and the rest are subsidiaries of foreign banks," said a senior banking source who is involved in the matter.

    The official launch will be in September or October, depending on the results of the testings and preparation, the source said.

    A second source with direct knowledge of the matter said authorities want to launch the first phase of CIPS before December.

    "If it's all smooth, (the launch) will be in September or October. If there is a need for a bit more time, we are still confident about (rolling it out) before the year-end," said the source, who declined to be named because he is not authorized to speak to the media.
    The system was expected to be launched in 2014 but was delayed by technical problems, with most market participants anticipating it would not come on stream before 2016.

    OPENING UP

    Currently, cross-border yuan clearing has to be done either through one of the offshore yuan clearing banks in the likes of Hong Kong, Singapore and London, or else with the help of a correspondent bank in mainland China.

    "Misunderstandings under the current clearing system happen from time-to-time due to different languages and codings. The CIPS is a breakthrough since it will offer a united platform and enhance efficiency," said Raymond Yeung, an analyst at ANZ in Hong Kong.

    The launch of CIPS will enable companies outside China to clear yuan transactions with their Chinese counterparts directly, reducing the number of stages a payment has to go through.

    "This is a big development for the small and medium enterprise sector operating in China as their correspondent banks can now access a wider network for settling payments in yuan, leading to lower costs," said the head of treasury solutions at a large European multinational company based in Hong Kong.

    For large international companies, CIPS will remove operational inefficiencies as companies will no longer have to worry about ensuring yuan transactions are processed at certain times of day, as they do now, he added.

    China's yuan became one of the world's top five payment currencies in November 2014, overtaking the Canadian dollar and the Australian dollar, according to global transaction services organization SWIFT.

    Global yuan payments increased by 20.3 percent in value in December compared to a year earlier, while the growth for payments across all currencies was 14.9 percent for the same period, SWIFT said.

    China has accelerated the pace of yuan internationalization in recent years. The central bank assigned 10 official yuan clearing banks last year, bringing the total number to 14 globally that can clear yuan transactions with China.

    The People's Bank of China was not immediately available for comment when contacted.

    (Additional reporting by Saikat Chatterjee in Hong Kong; Editing by Richard Borsuk and Rachel Armstrong)


    The Chinese have put out billboard ads announcing the renminbi as the new world currency

    by Simon Black on March 4, 2015


    March 4, 2015
    Bangkok, Thailand


    When I arrived to Bangkok the other day, coming down the motorway from the airport I saw a huge billboard—and it floored me.

    The billboard was from the Bank of China. It said: “RMB: New Choice; The World Currency”

    Given that the Bank of China is more than 70% owned by the government of the People’s Republic of China, I find this very significant.

    It means that China is literally advertising its currency overseas, and it’s making sure that everyone landing at one of the world’s busiest airports sees it. They know that the future belongs to them and they’re flaunting it.

    And it’s true. The renminbi’s importance in global trade and as a reserve currency is increasing exponentially, with renminbi trading hubs popping up all over the world, from Singapore to London to Luxembourg to Frankfurt to Toronto.

    Multinational companies such as McDonald’s are now issuing bonds in renminbi, and even sovereign governments are issuing debt denominated in renminbi, including the UK.

    Almost every major global player out there, be it governments or major multinationals, is positioning itself for the renminbi to become the dominant reserve currency.

    But here’s the thing. Nothing goes up and down in a straight line. And China is in deep trouble right now. The economy is slowing down and the enormous debt bubble is starting to burst.

    A lot of people, including the richest man in Asia, are starting to move their money out of the country.

    So while the long-term trend is pretty clear – China becoming the dominant economic and financial superpower – the short-term is going to look incredibly rocky.

    We talk about this in today’s short podcast with Sovereign Man’s Chief Investment Strategist, Tim Staermose, which includes a few ways to actually make money from China’s short-term unwinding.

    Have a listen here: http://www.sovereignman.com/podcast/034-heres-exactly-how-you-can-profit-from-chinas-short-term-unwinding-16312/

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    Putin signs law on ratification of $100 billion BRICS New Development Bank deal

    Published time: March 09, 2015 14:30
    Edited time: March 10, 2015 06:45 Get short URL


    Reuters/Paulo Whitaker

    Tags
    Banking, Russia, Russia and the global economy

    Russian President Vladimir Putin has signed a law ratifying the deal establishing the BRICS New Development Bank (NDB), according to a document published on Monday on Russia's official website for legal information.

    The BRICS New Development Bank (NDB) was set up to challenge two major Western-led giants – the World Bank and the International Monetary Fund.

    NDB's key role will be to serve as a pool of currency for infrastructure projects within a group of five countries with major emerging national economies - Russia, Brazil, India, China and South Africa.

    According to the Russian Finance Ministry, the New Development Bank is expected to start functioning fully by the end of the year, with the headquarters slated for opening in Shanghai. The chairmanship, with a term of five years, will rotate among the members.



    It's hoped the new bank will stamp the growing influence of the BRICS. The NDB is expected to become one of the world's key institutions, with a stated capital of $100 billion. Each of the five-member countries is expected to allocate an equal share of the $50 billion startup capital that will be expanded to $100 billion. Russia has agreed to provide $2 billion from the federal budget for the bank over the next seven years.

    The bank, which will be able to start lending in 2016, will be open to other countries that are members of the United Nations. The BRICS share is never to decline below 55 percent, however. The money will be used to finance development projects in the emerging economies.

    India will serve as the first five-year rotating president, and the first Chairman of the Board of Directors will be Brazilian.

    The bank was first proposed in 2012. The signing of the agreement to create the joint development bank by the heads of the five countries took place at the BRICS summit in Fortaleza, Brazil, in June 2014.

    The lower chamber of the Russian parliament, the State Duma, ratified the agreement on the NDB establishment last month.

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    Nikita Khrushchev: "We will bury you"
    "Your grandchildren will live under communism."
    添ou Americans are so gullible.
    No, you won稚 accept
    To view links or images in signatures your post count must be 15 or greater. You currently have 0 posts.
    outright, but we値l keep feeding you small doses of
    To view links or images in signatures your post count must be 15 or greater. You currently have 0 posts.
    until you値l finally wake up and find you already have communism.

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  4. #244
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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    US holds out against new Asian Infrastructure Investment Bank


    • 1 day ago March 31, 2015 6:19PM


    China flexes its financial muscle



    VIDEO

    WHEN people try to pinpoint the start of a new world order they could look to March 2015.


    This week, Australia announced it would sign on to China痴 plans to create a new Asian Infrastructure Investment Bank to rival global institutions like the World Bank and International Monetary Fund.

    But far from being some boring economic plan, the bank which aims to address the $8 trillion infrastructure gap and provide $100 billion for new roads, bridges and ports in Asian economies could usher in a new phase of regional influence for China without US involvement.

    UNSW痴 Institute of Global Finance director Fariborz Moshirian said China痴 massive foreign exchange reserves and desire for more power have driven Beijing痴 plan.

    鼎hina is trying to use economic muscle and also in a sense it痴 a reaction to the Bretton Woods institutions like the IMF and World Bank. They are seen as US and European children and China wants to make their own mark.

    的t痴 sort of a byproduct of the rise of the financial strength of China ... We池e going to see more of this kind of influence because China can afford now to take part of this kind of activity.


    Treasurer Joe Hockey said the bank will be a truly global institution: Picture: Photo: Tim Marsden Source: GoldCoastBulletin


    Overnight, Japan, Taiwan and Egypt expressed interest in become founding members taking the total number of countries involved to more than 40. They池e the latest in a flood of traditional US allies who have signalled intention to join including Australia, Britain, New Zealand, France, Germany, Switzerland and South Korea.

    It leaves the US the only major economy not involved, a decision described as 菟roblematic at best and churlish at worst by Brookings Institution analyst Jonathan Pollack. It comes after the US waged a lobbying campaign against the plan citing concerns over how the bank will be managed.

    Professor Moshirian said the fact the US is now the only holdout is a clear sign US allies are not willing to stand by at the expense of their own economic development, with many European partners saying 妬f you can稚 beat them, join them.

    典hey don稚 want to be isolating themselves. They致e got very close links with China in terms of trade and investment and why shouldn稚 you? If money is being thrown about by China why shouldn稚 they grab it? China is becoming strong so why should you isolate yourself?


    The Asian region is home to some of the world痴 fastest growing economies and is home to nearly 1 billion middle income consumers. Picture: WANG ZHAO. Source: AFP


    Australian Institute of International Affairs Ashley Rogge said the mass influx has left the US feeling 兎mbarrassed after stalled IMF reforms mean the US missed an opportunity to give China greater say in existing organisations.

    的f there痴 any reason for them to be embarrassed it痴 for that reason, she said. 典hey had the opportunity to encourage China in a cooperative manner [but] they kind of forfeited that as these reforms have stalled.

    典hese new institutions are now being created because they have dropped the ball. Now they致e created this opposition which is the total opposite of they wanted.


    The bank plans to raise more than $100 billion for regional infrastructure projects. Picture: AP: Source: News Limited

    Details over where the bank will based and how it will work are still underway with more discussions expected before countries formally sign on. However joining the negotiations early means they will receive a greater say in how the bank is shaped.

    Prime Minister Tony Abbott said on Sunday progress in terms of transparency and governance prompted Australia痴 late decision to apply for membership. However he stressed that key matters like authority over major investments and who has ultimate control still need to be resolved.

    Treasurer Joe Hockey said interest from other countries also helped.

    (It) has been encouraging for Australia to know that it truly is a global organisation, he said. 展e could massively increase our exports of iron ore to India if there were better port facilities.

    Overnight, US Treasury Secretary Jack Lew said Washington wants the new AIIB to partner with other Washington-based institutions on projects, with officials still worried about how lending will take place.

    Professor Moshirian said while the door is likely to remain open to US involvement, the reality is China has the money and partnerships to do it anyway.

    鼎hina will go ahead regardless of US. If the US joins it fine, if not China will set the tone for this entity anyway.

    Chinese President Xi Jinping said China will spend more than $640 billion investing in other countries in the next five years and 澱eing a big country means shouldering more responsibility for world peace and development.

    The deadline for countries to apply to join the bank is 31 March.


    China's new development bank is becoming a massive embarrassment for Obama




    • Mar. 31, 2015, 7:43 AM




    China's new development bank, which was announced just five months ago, is becoming a massive headache for the US.

    Try as it might, the US government can't persuade its allies to stop joining the Asian Infrastructure Investment Bank (AIIB).

    The bank will be a bit like the World Bank, providing loans to developing countries in Asia for infrastructure projects.

    Unlike the World Bank, China will hold the reins of the AIIB. The US administration is publicly worried that the institution will not meet high governance standards, but it really seems opposed to the move because it signals a growing Chinese influence in the region and in global politics.

    The US has already endured a series of embarrassments over the bank. It might have been expected that some European countries with a cooler relationship with the US would join, which they did. India and Singapore, however, were quick to sign up despite having decent relationships with the US. And several other countries have started joining, leaving the US almost completely isolated in its position.

    Britain is one of the US' closest allies, but the government has been pursuing an unashamedly warmer relationship with China for several years and was one of the first countries to say it wanted a role in the AIIB.

    The front page of the Financial Times the next day, in which anonymous White House sources attacked the British government for "constant accommodation" of China, might have been intended as a warning to others, but it doesn't seem to have worked.

    South Korea has applied, and America's other major allies in the region, Japan and Australia, have been warming to the idea of joining.

    Tuesday, however, brought the most embarrassing event of all. Taiwan, which has no formal relationship with mainland China, is a former enemy of China, and basically survived the 20th century with its independence only through assistance from the United States, applied to join the AIIB.

    The infrastructure bank isn't going to be a massive boom for the UK economy, or even for nearer nations like Japan, and the US will not retaliate. The point is that the UK is willing to take a very modest improvement in economic and political ties with China in exchange for a small deterioration in ties with the US. Pretty much every country has decided that this is the right move.

    The AIIB is a part of the wider "new Silk Road" initiative by China to deepen trade and investment both in the rest of Asia and the wider world. According to Barclays, it could actually be a positive thing for the region's stability:

    We believe through the building of interdependent relationships based on shared economic interests, this New Silk Road plan should deepen political linkages, improve mutual understanding and foster long-term stability in the region. The agreement to set up the AIIB by countries that have territorial disputes with China suggests potentially lower geopolitical risks and lower probability for military conflicts, in our view.

    But the move goes beyond that it's a major PR push for China, which the American administration has positioned itself opposite from. So far, that strategy is failing spectacularly for the US.

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    Nikita Khrushchev: "We will bury you"
    "Your grandchildren will live under communism."
    添ou Americans are so gullible.
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    outright, but we値l keep feeding you small doses of
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    until you値l finally wake up and find you already have communism.

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    47 Countries to Join China-Led Development Bank

    The number of countries applying to be founding members of the Asian Infrastructure Investment Bank (AIIB) rose to 46 by the Tuesday deadline.


    ゥ AFP 2015/ Takaki Yajima /POOL
    Beijing May Not Allow Taiwan to Join AIIB to Avoid 'Two Chinas' Situation

    The AIIB is a multilateral development bank proposed by China to provide financing to infrastructure projects in the Asia region. The soaring participation reflects China's growing international clout and many countries’ desire for a more inclusive, balanced and mutually beneficial international economic order, Xinhua news agency reported.

    The growing infrastructure demand in cash-strapped Asian countries will necessitate the need for more than $700 billion each year by 2020.

    More countries are urging Washington to approve IMF quota reforms to allow a better balance of power, but previous attempts to give greater weight to rising states have stalled out of national interests.


    ゥ Sputnik/ Sergey Guneev
    Boosting Bilateral Ties: Russia Vows to Join Chinese-led Development Bank

    This is exactly where the AIIB, a China-proposed international lender open to all qualified countries, came in ready to finance major infrastructure projects in Asia and meet the growing demand for a more inclusive and balanced international financial order. Focused as it is on infrastructure development in Asia, the AIIB offers abundant trade and investment opportunities also for developed countries with advanced technology.

    47 countries have already applied to join AIIB including China, India, Indonesia, Israel, Bangladesh, Brunei, Cambodia, Jordan, Kazakhstan, Kuwait, Laos, Maldives, Malaysia, Mongolia, Myanmar, Nepal, New Zealand, Oman, Pakistan, Philippines, Qatar, Saudi Arabia, Singapore, Sri Lanka, Tajikistan, Uzbekistan, Thailand, Vietnam, France, Germany, Italy, the United Kingdom, Luxembourg, Switzerland, Austria, Turkey, South Korea, Brazil, Russia, Georgia, the Netherlands, Denmark, Australia, Egypt, Finland, Kyrgyzstan and Sweden.

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    This Is Why The US Just Lost Its Superpower Status According To Larry Summers

    Submitted by Tyler Durden on 04/06/2015 08:12 -0400

    If Larry Summers were a country, he would have joined the Asian Infrastructure Investment Bank. With a backpedalling Washington now completely isolated in its opposition to the China-led venture and with support and enthusiasm running so high that even Beijing itself is apparently surprised, none other than “the hawk” that was almost, kind of considered for the chairmanship of the Fed is out with a sharp rebuke of the US stance calling March “the moment the United States lost its role as the underwriter of the global economic system.” Of course we’ve been persistent in our contention that the AIIB represents much more than an attempt on China’s part to provide an alternative source of infrastructure financing to fill the gaps left by the ADB, and as is made abundantly clear by the following, the “secret” is certainly out...
    * * *
    Time US Leadership Woke Up To New Economic Era, by Larry Summers

    This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system. True, there have been any number of periods of frustration for the US before, and times when American behaviour was hardly multilateralist, such as the 1971 Nixon shock, ending the convertibility of the dollar into gold. But I can think of no event since Bretton Woods comparable to the combination of China’s effort to establish a major new institution and the failure of the US to persuade dozens of its traditional allies, starting with Britain, to stay out of it.

    This failure of strategy and tactics was a long time coming, and it should lead to a comprehensive review of the US approach to global economics. With China’s economic size rivalling America’s and emerging markets accounting for at least half of world output, the global economic architecture needs substantial adjustment. Political pressures from all sides in the US have rendered it increasingly dysfunctional.

    Largely because of resistance from the right, the US stands alone in the world in failing to approve the International Monetary Fund governance reforms that Washington itself pushed for in 2009. By supplementing IMF resources, this change would have bolstered confidence in the global economy. More important, it would come closer to giving countries such as China and India a share of IMF votes commensurate with their new economic heft.

    Meanwhile, pressures from the left have led to pervasive restrictions on infrastructure projects financed through existing development banks, which consequently have receded as funders, even as many developing countries now see infrastructure finance as their principle external funding need.

    With US commitments unhonoured and US-backed policies blocking the kinds of finance other countries want to provide or receive through the existing institutions, the way was clear for China to establish the Asian Infrastructure Investment Bank. There is room for argument about the tactical approach that should have been taken once the initiative was put forward. But the larger question now is one of strategy. Here are three precepts that US leaders should keep in mind.

    First, American leadership must have a bipartisan foundation at home, be free from gross hypocrisy and be restrained in the pursuit of self-interest. As long as one of our major parties is opposed to essentially all trade agreements, and the other is resistant to funding international organisations, the US will not be in a position to shape the global economic system.

    Other countries are legitimately frustrated when US officials ask them to adjust their policies — then insist that American state regulators, independent agencies and far-reaching judicial actions are beyond their control. This is especially true when many foreign businesses assert that US actions raise real rule of law problems.

    The legitimacy of US leadership depends on our resisting the temptation to abuse it in pursuit of parochial interest, even when that interest appears compelling. We cannot expect to maintain the dollar’s primary role in the international system if we are too aggressive about limiting its use in pursuit of particular security objectives.

    Second, in global as well as domestic politics, the middle class counts the most. It sometimes seems that the prevailing global agenda combines elite concerns about matters such as intellectual property, investment protection and regulatory harmonisation with moral concerns about global poverty and posterity, while offering little to those in the middle. Approaches that do not serve the working class in industrial countries (and rising urban populations in developing ones) are unlikely to work out well in the long run.

    Third, we may be headed into a world where capital is abundant and deflationary pressures are substantial. Demand could be in short supply for some time. In no big industrialised country do markets expect real interest rates to be much above zero in 2020 or inflation targets to be achieved. In the future, the priority must be promoting investment, not imposing austerity. The present system places the onus of adjustment on “borrowing” countries. The world now requires a symmetric system, with pressure also placed on “surplus” countries.

    These precepts are just a beginning, and many questions remain. There are questions about global public goods, about acting with the speed and clarity that the current era requires, about co-operation between governmental and non-governmental actors, and much more. What is crucial is that the events of the past month will be seen by future historians not as the end of an era, but as a salutary wake up call.

    http://www.zerohedge.com/news/2015-0...-larry-summers

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    Iran Joins China-Led Asian Infrastructure Investment Bank

    The China-led Asian Infrastructure Investment Bank accepted Iran's membership on Tuesday, the Iranian embassy in Beijing said.


    ゥ AP Photo/ Michel Euler
    Moscow’s AIIB Membership to Bring More Foreign Investments in Russia

    The Islamic Republic thus became the 34th founding member of the AIIB, which is the main rival of the World Bank, Iran’s Fars news agency reported. The Iranian embassy noted that the AIIB officials had invited Iran's banking officials to attend the upcoming meetings of the bank.

    Fifty-seven countries have applied for membership in the international bank and 34 have already been granted membership.

    China is going to invest about $50 billion in the bank to hold about 50 percent of AIIB's shares.

    Russia’s First Deputy Prime Minister Igor Shuvalov, speaking on Saturday at a forum in Boao on the Southern Chinese island of Hainan, said the country plans to join the AIIB.

    Washington’s European allies including Britain, France, Germany and Italy have already also announced they would join the bank, leaving the US isolated, World Bulletin reported.

    Other countries such as Turkey and South Korea have also said they would join. Brazil, China's top trading partner, said on Friday it would sign up.

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    China-led Asian investment bank welcomes 5 new members

    Published time: April 12, 2015 17:23 Get short URL


    China's President Xi Jinping (3rd R) meets with the guests at the Asian Infrastructure Investment Bank launch ceremony at the Great Hall of the People in Beijing October 24, 2014. (Reuters/Takaki Yajima
    )

    The founding states of the new Asian Infrastructure Investment Bank (AIIB) have approved the applications of Brazil, Georgia, Finland, Denmark and the Netherlands as founding members, the Chinese Finance Ministry announced Saturday.

    "With the consent of the existing founding members, the Netherlands, Brazil, Finland, Georgia and Denmark officially became founding countries of the AIIB on April 12," the ministry said in a statement on its website, adding that the total number of founders has now reached 46.

    The founding members have a priority over others, as they possess the right to establish the rules for the bank’s activities.

    READ MORE: Spain, S.Korea and Austria approved as founding members of China-led bank AIIB

    Applications to join the bank with the rights of founding members were filed by 52 countries, including Russia. The final list of AIIB founding members will be announced April 15.

    The United States and Japan are the two big holdouts who have abstained from joining the AIIB. Earlier media reported that China had rejected the request of North Korea; however, the country’s Foreign Ministry hasn’t confirmed this information, saying that it "doesn’t possess any relevant information." Taiwan has applied for membership in the AIIB despite the animosity and lack of formal diplomatic relations between the island and continental China.

    READ MORE: Beijing calling: Australia & Denmark defy US by applying to join China-led bank

    Experts consider AIIB a potential competitor to such global financial institutions as the US-led IMF and World Bank. However, IMF chief Christine Lagarde said earlier in March that the IMF and the World Bank would be "delighted" to cooperate with the AIIB. Beijing has repeatedly said that AIIB will be a fine complement to the existing international financial institutions.

    In October 2014, 21 countries signed the agreement on establishing the AIIB, which is intended to finance infrastructure projects in the Asia-Pacific Region. The bank plans to rapidly increase its initial subscribed capital of $50 billion to $100 billion.

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    Report: Saudis Vow To Sell US Assets If Congress Decides Their Gov’t Was Involved In 9/11

    Via Fox News:


    Saudi Arabia has reportedly told the Obama administration and congressional leaders that it will sell billions of dollars in U.S. financial assets if Congress passes a bill to make the Saudi government legally responsible for any role in the 9/11 attacks.

    The administration has tried to stop Congress from passing the legislation, a bipartisan Senate bill, since Saudi Foreign Minister Adel al-Jubeir last month told Washington lawmakers his country’s position, according to The New York Times.

    Al-Juberi purportedly informed the lawmakers during a trip to Washington that Saudi Arabia would be forced to sell as much as $750 billion in Treasury securities and other American financial assets on the world market, fearing the legislation could become law and U.S. courts would then freeze the assets.
    Keep reading…




    Saudi Arabia Warns of Economic Fallout if Congress Passes 9/11 Bill


    President Obama at a Sept. 11 ceremony in 2015. The Obama administration argues that the bill would put Americans at legal risk overseas.

    Stephen Crowley / The New York Times

    By MARK MAZZETTI

    April 15, 2016

    WASHINGTON — Saudi Arabia has told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars’ worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks.

    The Obama administration has lobbied Congress to block the bill’s passage, according to administration officials and congressional aides from both parties, and the Saudi threats have been the subject of intense discussions in recent weeks between lawmakers and officials from the State Department and the Pentagon. The officials have warned senators of diplomatic and economic fallout from the legislation.

    Adel al-Jubeir, the Saudi foreign minister, delivered the kingdom’s message personally last month during a trip to Washington, telling lawmakers that Saudi Arabia would be forced to sell up to $750 billion in treasury securities and other assets in the United States before they could be in danger of being frozen by American courts.

    Several outside economists are skeptical that the Saudis will follow through, saying that such a sell-off would be difficult to execute and would end up crippling the kingdom’s economy. But the threat is another sign of the escalating tensions between Saudi Arabia and the United States.

    The administration, which argues that the legislation would put Americans at legal risk overseas, has been lobbying so intently against the bill that some lawmakers and families of Sept. 11 victims are infuriated. In their view, the Obama administration has consistently sided with the kingdom and has thwarted their efforts to learn what they believe to be the truth about the role some Saudi officials played in the terrorist plot.

    “It’s stunning to think that our government would back the Saudis over its own citizens,” said Mindy Kleinberg, whose husband died in the World Trade Center on Sept. 11 and who is part of a group of victims’ family members pushing for the legislation.

    President Obama will arrive in Riyadh on Wednesday for meetings with King Salman and other Saudi officials. It is unclear whether the dispute over the Sept. 11 legislation will be on the agenda for the talks.

    A spokesman for the Saudi Embassy did not respond to a message seeking comment.

    Saudi officials have long denied that the kingdom had any role in the Sept. 11 plot, and the 9/11 Commission found “no evidence that the Saudi government as an institution or senior Saudi officials individually funded the organization.” But critics have noted that the commission’s narrow wording left open the possibility that less senior officials or parts of the Saudi government could have played a role. Suspicions have lingered, partly because of the conclusions of a 2002 congressional inquiry into the attacks that cited some evidence that Saudi officials living in the United States at the time had a hand in the plot.

    Those conclusions, contained in 28 pages of the report, still have not been released publicly.

    The dispute comes as bipartisan criticism is growing in Congress about Washington’s alliance with Saudi Arabia, for decades a crucial American ally in the Middle East and half of a partnership that once received little scrutiny from lawmakers. Last week, two senators introduced a resolution that would put restrictions on American arms sales to Saudi Arabia, which have expanded during the Obama administration.

    Families of the Sept. 11 victims have used the courts to try to hold members of the Saudi royal family, Saudi banks and charities liable because of what the plaintiffs charged was Saudi financial support for terrorism. These efforts have largely been stymied, in part because of a 1976 law that gives foreign nations some immunity from lawsuits in American courts.

    The Senate bill is intended to make clear that the immunity given to foreign nations under the law should not apply in cases where nations are found culpable for terrorist attacks that kill Americans on United States soil. If the bill were to pass both houses of Congress and be signed by the president, it could clear a path for the role of the Saudi government to be examined in the Sept. 11 lawsuits.


    Interactive Feature | The Big Four in Saudi Arabia’s Government Brief background information on the most powerful figures in the kingdom, and how they stand in the sometimes complicated order of succession.

    Obama administration officials counter that weakening the sovereign immunity provisions would put the American government, along with its citizens and corporations, in legal risk abroad because other nations might retaliate with their own legislation. Secretary of State John Kerry told a Senate panel in February that the bill, in its current form, would “expose the United States of America to lawsuits and take away our sovereign immunity and create a terrible precedent.”

    The bill’s sponsors have said that the legislation is purposely drawn very narrowly — involving only attacks on American soil — to reduce the prospect that other nations might try to fight back.

    In a closed-door briefing on Capitol Hill on March 4, Anne W. Patterson, an assistant secretary of state, and Andrew Exum, a top Pentagon official on Middle East policy, told staff members of the Senate Armed Services Committee that American troops and civilians could be in legal jeopardy if other nations decide to retaliate and strip Americans of immunity abroad. They also discussed the Saudi threats specifically, laying out the impacts if Saudi Arabia made good on its economic threats.

    John Kirby, a State Department spokesman, said in a statement that the administration stands by the victims of terrorism, “especially those who suffered and sacrificed so much on 9/11.”

    Edwin M. Truman, a fellow at the Peterson Institute for International Economics, said he thought the Saudis were most likely making an “empty threat.” Selling hundreds of billions of dollars in American assets would not only be technically difficult to pull off, he said, but would also very likely cause global market turmoil for which the Saudis would be blamed.

    Moreover, he said, it could destabilize the American dollar — the currency to which the Saudi riyal is pegged.
    “The only way they could punish us is by punishing themselves,” Mr. Truman said.

    The bill is an anomaly in a Congress fractured by bitter partisanship, especially during an election year. It is sponsored by Senator John Cornyn, Republican of Texas, and Senator Chuck Schumer, Democrat of New York. It has the support of an unlikely coalition of liberal and conservative senators, including Al Franken, Democrat of Minnesota, and Ted Cruz, Republican of Texas. It passed through the Judiciary Committee in January without dissent.

    “As our nation confronts new and expanding terror networks that are targeting our citizens, stopping the funding source for terrorists becomes even more important,” Mr. Cornyn said last month.

    The alliance with Saudi Arabia has frayed in recent years as the White House has tried to thaw ties with Iran — Saudi Arabia’s bitter enemy— in the midst of recriminations between American and Saudi officials about the role that both countries should play in the stability of the Middle East.

    But the administration has supported Saudi Arabia on other fronts, including providing the country with targeting intelligence and logistical support for its war in Yemen. The Saudi military is flying jets and dropping bombs it bought from the United States — part of the billions of dollars in arms deals that have been negotiated with Saudi Arabia and other Persian Gulf nations during the Obama administration.

    The war has been a humanitarian disaster and fueled a resurgence of Al Qaeda in Yemen, leading to the resolution in Congress to put new restrictions on arms deals to the kingdom. Senator Christopher S. Murphy, Democrat of Connecticut, one of the resolution’s sponsors and a member of the Senate Foreign Relations Committee, said that Congress has been “feckless” in conducting oversight of arms sales, especially those destined for Saudi Arabia.
    “My first desire is for our relationship with Saudi Arabia to come with a greater degree of conditionality than it currently does,” he said.

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    37 warning signs that something big is about to happen to the US petrodollar



    (TRUNEWS) What do the Fed’s emergency meetings in Washington D.C., the spree of US leaders visiting Saudi Arabia, and the beginning of bail-in’s have to do with the petrodollar? To help connect those dots, below is a detailed timeline of the significant financial and geopolitical events of the last 2 months.
    • Feb 3 2016: Russian President Vladimir Putin meets with globalist ambassador Henry Kissinger.


    • March 11 2016: Secretary of State John Kerry visited Hafr al-Batin in Saudi Arabia, 60 km southwest of King Khalid Military City, the area which hosted the 350,000 man military drill “Northern Thunder”.


    • March 16 2016: Russia begins surprise withdrawal of warplanes and ground forces from Syria.


    • March 26 2016: South African President Jacob Zuma visited Saudi Arabia and met with the Deputy Crown Prince Mohammed bin Salman bin Abdulaziz, the minister of defense. Pictures of President Zuma opening a weapons factory on his visit have since surfaced.


    • March 29 2016: British Defense Secretary Michael Fallon secretly visited Saudi Arabia and met with Crown Prince Mohammed bin Nayef bin Abdulaziz, who also serves as the deputy prime minister and interior minister.


    • April 3 2016: George Soros run International Consortium of Investigative Journalists (ICIJ) leaked 11.5 million confidential documents stolen from Panamanian law firm Mossack Fonseca, regarding offshore shell companies. The strategic leak attempted to paint Vladimir Putin and King Salman bin Abdulaziz al Saud as tax criminals.


    • April 3-5 2016: Indian Prime Minister Narendra Modi visited Saudi Arabia and met with King Salman bin Abdulaziz al Saud.


    • April 4 2016: Deputy Crown Prince Mohammed bin Salman outlines the Saudi Arabia’s plan to sell off ARAMCO, valued at $2.7 trillion, and transfer the money to the Public Investment Fund (PIF). This would make the PIF the largest fund on earth.


    • April 6 2016: King Salman bin Abdulaziz al Saud met with Egypt’s Prime Minister Sherif Ismail and launched a $16 billion Egyptian-Saudi investment fund, half capitalized in Saudi Arabia’s Riyal (SAR) and the rest in the Egyptian Pound (EGP). King Salman said he wants to build a “metaphorical bridge” between Egypt and Turkey.


    • April 6 2016: US Speaker of the House of Representatives Paul Ryan visited Saudi Arabia and was received by King Salmon bin Abulaziz at Al-Yamamah Palace. Accompanying Ryan were Congressman: Mac Thornberry-TX (Chairman of the Armed Services Committee); Devin Nunes-CA (California Chairman of the House Permanent Select Committee on Intelligence); Michael Turner-OH; Gregory Meeks-NY; Kristi Noem-SD; Ron Kind-WI; Will Hurd-TX.


    • April 8 2016: Atlanta Fed forecasts GDP growth at 0.1%. Two quarters of negative growth is the definition of a recession.


    • April 9 2016: The last 4 Fed chiefs: Janet Yellen ( 2014 — ); Ben Bernanke ( 2006 -2014 ); Alan Greenspan (1987 – 2006 ); Paul Volcker (1979 – 1987), held a rare meeting Thursday night at the International House in New York, a foreign grad students dormitory originally founded by the Rockefeller’s. The discussion was moderated by CNN’s Fareed Zakaria, an active member of the globalist think tank, the Council on Foreign Relations (CFR).


    • April 10 2016: Senior members from the two 9/11 investigation committee’s appeared on “60 Minutes” calling for release of the classified 28 pages of the Congressional 9/11 investigation. Members indicated documents prove Saudi Arabia’s involvement.


    • April 10 2016: Saudi owned PIF — the fund ARAMCO’s $2.7 trillion sell off will be transferred into — announces investment plan. 50 percent of holdings will be in foreign investments, China may purchase large chunk of ARAMCO.


    • April 11 2016: Austria became the first EU nation to employ the “bail in” procedure, rescuing creditor Heta Asset Resolution from bankruptcy as Austrian bank Hypo Alpe Adria announced it would be unable to pay back an outspend €11 billion.


    • April 11 2016: Emergency meeting called by Italy’s Finance Minister Pier Carlo Padoan. Italian bankers engage “last resort” to save banks crippled by €360 billion subprime loan burden, with only €50 billion capital in hand.


    • April 11-13 2016: Fed Chief Janet Yellen holds 3 days of closed door emergency meetings with the Fed’s Board of Governors. Unprecedented.




    • April 11-12 2016: Russian SU-24 fighter jets conducted 31 mock attack runs on the US Destroyer Donald Cook as it sailed through the Baltic Sea. Planes flew within 30 feet. A Russian Ka-27 Helix helicopter also conducted 7 overflights, reportedly taking pictures of the ship.


    • April 12-17 2016: Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group being held in Washington D.C. begin.


    • April 12 2016: WSJ publishes Fed and Federal Deposit Insurance Corp (FDIC) rejections of “Living Wills” from the 5 big US banks: J.P. Morgan, Wells Fargo, Bank of America, Bank of New York, and State Street. Massive illiquidity exposed.




    • April 13-15 2016: World Finance ministers and Central Bank Governors gather in Washington D.C. For a three day G-20 meeting.


    • April 13 2016: Fed and FDIC begin investigation to find anonymous sources of “Living Will” leak to WSJ.




    • April 13 2016: Etai Friedman, CEO of Eyal Capital Management, tells TRUNEWS that retail report shows US is entering recession, Fed forecasts are lies.


    • April 13-19 2016: Turkish President Recep Tayyip Erdogan met with King Salman bin Abdulaziz al Saud in Ankara for the Organization of Islamic Cooperation (OIC) summit. Previously met in Riyadh in December 2015 to sign the strategic cooperation agreement which began the 34 nation Arab coalition. This lead to the formation of the 350,000 man invasion force in Northern Saudi Arabia.




    • April 14 2016: Government regulators allow Fannie Mae and Freddie Mac to cut loans balances for 33,000 eligible U.S. borrowers who owe an unpaid principal balance of $250,000 or less and whose loan-to-value ratios exceed 115 percent.


    • April 14, 2016: Deutsche Bank admits to rigging Gold and Silver prices, agrees to expose other financial institutes complicit in price manipulation.


    • April 19 2016: China launches new yuan-denominated gold benchmark on Shanghai Gold Exchange (SGE).


    • April 19 2016: Next GDP growth update from Atlanta Fed.


    • April 20 2016: US Secretary of Defense Ashton Carter will visit Riyadh to meet with Saudi Arabia’s Deputy Crown Prince and Defense Minister Mohammed Bin Salman al-Saud. He will also attend a GCC ministerial meeting ahead of the GCC summit. Previously met with Deputy Crown Prince in Brussels Feb 11 2016.


    • April 21 2016: President Obama to visit Riyadh and meet with Saudi Arabia’s leader King Salmon bin Abulaziz, as well as a summit of leaders from the Gulf Cooperation Council. Previously visited for King Salmon’s crowning in 2014, after King Abdullah bin Abdulaziz al Saud died.







    A money changer counts U.S. dollar bills at a currency exchange office in central Istanbul April 15, 2015. REUTERS/Murad Sezer/Files






    New Dawn: China’s Renminbi Approved as a World Reserve Currency




    The International Monetary Fund on Monday admitted China’s yuan into its benchmark currency basket in a victory for Beijing’s campaign for recognition as a global economic power.

    The IMF’s executive board agreed to add the yuan, also known as the renminbi, to its Special Drawing Rights (SDR) basket alongside the dollar, euro, pound sterling and yen, in a move earlier backed by IMF chief Christine Lagarde and in-house experts.

    To meet the IMF’s criteria, Beijing has undertaken a flurry of reforms in recent months, including better access for foreigners to Chinese currency markets, more frequent debt issuance and expanded yuan trading hours.

    The currency will have a 10.92 percent share, in line with expectations, after a review of the weightings formula for the SDR, which determines which currencies countries can receive as part of IMF loans. The yuan’s inclusion is a largely symbolic move, with few immediate implications for financial markets. But it is the first time an additional currency has been added to the SDR basket and the biggest change in its composition in 35 years.

    Last set in 2010, the basket is currently 41.9 percent dollar, 37.4 percent euro, 11.3 percent sterling and 9.4 percent yen. The yuan CNH= CNY= would not join until October 2016, allowing reserve managers time to prepare. Under the new weightings, the euro’s share will drop to 30.93 percent. Sterling and yen will also have lower weights while the dollar remains about the same.

    To be included in the SDR basket, the yuan had to meet the criteria to be “freely usable,” or widely used to make international payments and widely traded in foreign exchange markets — a yardstick it missed at the last review in 2010.

    The addition is likely to fuel demand for China’s currency and for renminbi-denominated assets as central banks and foreign fund managers adjust their portfolios to reflect the yuan’s new status. Currency analysts estimate the IMF seal of approval could fuel demand worth more than $500 billion in coming years and take the yuan’s share of global reserve holdings to around 5 percent, overtaking the Canadian and Australian dollars.

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    Why Goldman Expects The Japanese Yen To Collapse Within 12 Months

    Submitted by Tyler Durden on 04/24/2016 16:23 -0400

    Forget the G-20 agreement on no "competitive devaluations" - the full court press on the Bank of Japan to engage in the next round of aggressive currency devaluation is on, just three months after Kuroda unveiled Japan's first negative interest rate. Recall that it was Goldman who not only brought forward its forecast for a first rate hike from July to April and first suggested earlier this week that it is time for the Bank of Japan to forget about caution and to more than double its purchases of equities in the form of ETFs (and which the BOJ already owns a majority of all available securities) as doing either more NIRP and more QE may no longer have a favorable outcome:


    ... we think the BOJ is most likely to ease mainly via the qualitative measure, with increasing ETF purchasing the central pillar, with a view to improving business confidence. We think the market is already factoring in an increase in annual purchasing from ・3.3 tn to ・5-6 tn, and we thus think the BOJ may look to slightly more than double its current figure to around ・7 tn.
    This pushed both the USDJPY and the S&P off their overnight lows when it was first floated in the early morning of April 20.



    Then, on Friday, the Yen had its biggest one day surge since the announcement of the expanded QQE in October 2014 when Bloomberg reported of the latest BOJ trial balloon whereby "the Bank of Japan may consider helping banks lend by offering a negative rate on some loans, according to people familiar with talks at the BOJ." This happened just as the net spec short position in the USDJPY hit record short, forcing yet another massive squeeze in the currency which soared higher by nearly 300 pips in one day.



    Which brings us to today, when in its latest attempt to throw everything at the wall and hope something sticks, Goldman Sachs' FX team - whose trading recommendations in the past 6 months have been an unmitigated disaster - is predicting that the $/JPY will "move higher again in the near term and continue to forecast $/JPY at 130 a year from now."

    Why does Goldman expect a collapse in the Yen by nearly 20 big figures?

    Because as analysts Sylvia Ardagna and Robin Brooks note, "the BoJ faces an important challenge: it needs to reaffirm that the monetary easing arrow of Abenomics is still on course, or the market will price that the central bank is backtracking from the 2% inflation goal. This could be extremely disruptive for the Japanese economy. Using markets jargon, the BoJ is already so long into 'the reflationary trade' that it has to continue to deliver further accommodation for the time being."

    In other words, having committed to a terminal expansion of its balance sheet, it is far too late for Kuroda to backtrack, especially since the recent massive growth in its balance sheet has actually led to a just as massive capital outflow from Japan, as investors have been rapidly pulling out funds from Japan afraid that the BOJ will be the first central bank to lose all control. Goldman is basically saying that the Bank of Japan has no way out.



    Indeed, since the launch of NIRP, the Bank of Japan has indeed effectively lost control, manifesting by the inverse reaction of the Yen to Japan's launch of NIRP. This is Goldman's take:

    "Since the Bank of Japan introduced negative interest rates at the end of January, $/JPY has appreciated 8%. While part of this $/JPY strength has been triggered by a repricing of the Federal Reserve’s pace of hikes, the performance of the cross also reflects an increasing conviction among investors that the Bank of Japan has run out of ammunition and that its 2% inflation target will never be met. We in the FX Strategy team disagree with this line of argument, and in this FX Views we discuss our expectations for the outcome of the upcoming BoJ meeting, the monetary and fiscal policy mix that we expect to be implemented in Japan before the Summer, and why we believe the policy outlook is supportive of our strong conviction that $/JPY will move higher in coming months."

    As Exhibit 1 shows, the $/JPY appreciation since the end of January has been accompanied by a widening of the JPY-USD inflation differential. At the same time, spot inflation has decelerated and core CPI is at 0%. In a recent interview with the Wall Street Journal, Governor Kuroda emphasized that the BoJ remains committed to winning the battle against deflation, but that the recent broad-based JPY strength poses a material risk for the inflation dynamics[1]. A more dovish Fed that is also concerned about USD appreciation does not help to break this negative loop.


    However, unlike its economist team, Goldman's FX team is confident that the BOJ will revert to doing what it has been doing - and failing at - since 2013: massively expanding its balance sheet, nevermind concerns voiced both here years ago and by the IMF more recently, that the central bank is running out of willing sellers for government securities.

    In the FX team, we think that the emphasis could be placed much more squarely on balance sheet expansion than on interest rates policy, in sympathy with the ECB in March. Investors are now justifiably asking whether shorting the currency or going long the Nikkei offers a better risk-reward going into the BoJ’s meeting if the focus is going to be on further balance sheet expansion and more ETF purchases. Our short answer is that we like both trades as, in coming months, we could see a replay of trends observed when QQE was first started.
    Or just because it didn't work for the first three years, and the Nikkei recently dipped to a level as if the BOJ's QE expansion never actually happened, doesn't mean doing even more won't work. We can only imagine that Goldman has been talking to Krugman.

    Indeed, for Goldman it is all about no longer doing what doesn't push the market higher, namely more NIRP, and sticking with what has benefited Japan's stocks, i.e., more monetization: "as the BoJ delivers more stimulus via QQE, asset prices should respond, as in the past, to an increasingly expansionary monetary policy stance. We expect $/JPY to move higher again in the near term and continue to forecast $/JPY at 130 a year from now."



    Furthermore, the BOJ will have one additional factor going in its favor: the recent devastating earthquakes, which will allow the Finance Ministry to unveil an extra budget. This means more bonds for the BOJ to monetize which directly leads to a lower Yen and a higher Nikkei. It appears that destructive earthquakes are indeed a Keynesian's best friend. To wit:

    Our strong conviction on the currency is also linked to the broader policy mix we expect to be implemented in Japan before the Summer. To boost economic activity ahead of the July elections, Prime Minister Abe is likely to announce a fiscal expansion (between 1% and 2% of GDP). Moreover, following the recent earthquakes, there could be scope for increasing the size of the package. However, unlike at the beginning of its mandate, we in the FX team do not expect the government to announce a future fiscal contraction to offset the initial expansion (this is what happened in 2013, when the VAT tax increase was legislated to prevent concerns on debt sustainability and the BoJ independence).
    In other words, as we suggested last week in "We Aren’t Thinking About It At All", Or How Kuroda Just Assured That Helicopter Money Is Coming To Japan, the BOG is indeed making an overture to becoming the first central bank to openly embrace helicopter money.

    This time, a larger deficit-to-GDP ratio could be more openly funded by a further expansion of the QQE program via purchases of long-dated JGBs. Negative bond yields across the maturity structure also make the fiscal expansion much less costly. The larger the fiscal expansion, the larger the amount of JGB purchases, and the longer the JGB maturities the Finance Ministry will issue and the BoJ will buy, increasing the probability of higher inflation, lower real rates and a weaker currency.


    To Goldman what is about to be unveiled by Japan is an episode of fiscal and monetary policy "coordination", which should lead to higher break-even inflation, lower real rates and a weaker currency. This would be the first baby step toward helicopter money, a move which according to Goldman is now justified for the following reasons:

    • First, the Japanese economy is in a liquidity trap with nominal interest rates negative up to 10-year maturities. So, all else equal, a fiscal expansion should not generate higher nominal interest rates and a stronger currency, crowding out investment and exports.
    • Second, the fiscal expansion would not occur in isolation, but would take place together with further monetary expansion. The BoJ would continue to support JGB prices, control yields along the term structure and prevent an increase in fiscal risk premia by purchasing larger quantities of short- and long-dated bonds.
    • Third, by making the fiscal expansion permanent and funded through money creation (a politically correct phrase for a form of 'helicopter money'), expectations of future inflation should increase and real rates fall, not just because of the further increase in the monetary base, but mainly because a more open coordination of the fiscal and monetary authority would make it explicit that policy makers are willing to monetize part of the debt and any fiscal expansion announced by the government.

    Goldman's conclusion:

    In a nutshell, it is the view of the writers that one or a series of permanent fiscal expansions accommodated by expansions and/or an extension of duration of JGB purchases by the BoJ could be a pretty strong policy mix that could help to boost inflation expectations, as it should become increasingly clear that monetary and fiscal policy independence remains an institutional feature de jure, but less so de facto. And, once started, the government could also continue to announce monetary financed expansionary fiscal policies, at least until inflation reaches the new target.

    In the same Wall Street Journal interview cited above, Governor Kuroda strongly defended the independence of monetary and fiscal policy (and ruled out the use of 'helicopter money' and the risk of fiscal dominance), but he also acknowledged that the “monetary authority and the fiscal authorities can cooperate and coordinate their policies, and quite effectively’’. A more open coordination could move market expectations.

    As our Japan economist Naohiko Baba wrote in "Fiscal discipline at a critical juncture with three-dimensional monetary easing" the fiscal and monetary policy mix could turn out to be similar to that implemented in the 1930s during the Takahashi administration. The outcome could even be an overshooting of the BoJ’s 2% inflation target.

    It is striking that markets are not pricing this scenario at all. On the contrary, markets still doubt Prime Minister Abe and BoJ Governor Kuroda's commitment to reflate the Japanese economy. We in the FX strategy team do not.
    Yes, because the Goldman FX team's track record has been so immaculate in the past year, and has been right in FX even as the market has been repeatedly wrong...
    Sarcasm aside, it will be extremely interested to see the market's reaction to this proposal for the BOJ to unleash helicopter money will be the response in Japanese yields, which are already trading at record low yields. If yields plunge even further into negative territory, then Goldman's entire thesis that Helicopter money will be seen as reflationary will be thrown out of the window as the entire nation will scramble into the "safety" of Japanese paper, which now will be monetized by the BOJ will complete and utter abandon.

    On the other hand, should yields spike, it may be even worse for Japan: after all with BOJ holdings rapidly approaching half of all marketable securities, there is absolutely no liquidity in the BOJ market, and should a sharp reversal take place there is an all too real risk the entire JGB market may go bidless unveiling the "endgame" scenario predicted by former IMF chief economist Olivier Blanchard just two weeks ago.

    Of course, the most likely outcome here is that Goldman's FX team will simply be dead wrong as has been the consistent case for months, and while Japan may indeed unveil helicopter money as soon as this week (after all Kuroda is known best for succumbing to peer pressure when it comes to monetary policy) the result may be not only a further plunge in JGB yields, but a surge in the Yen.

    If that is indeed the outcome, then the first test of the monetary helicopter will be a crash on take off, which in turn will mean that the last play left in the central bankers' playbook is dead on arrival. We eagerly look forward to finding out what "tools" they will have left after such an epic failure.



    Cyber Fraud At SWIFT – $81 Million Stolen From Central Bank


    Submitted by GoldCore on 04/26/2016 07:30 -0400

    Swift, the vital global financial network that western financial services companies, institutions and banks use for all payments and transfer billions of dollars every day, warned its customers yesterday evening that it was aware of cyber fraud and a number of recent "cyber incidents” where attackers had sent fraudulent messages over its system and $81 million was apparently stolen from a central bank.

    SWIFT (Wikipedia)


    As reported by Reuters, the disclosure came as law enforcement agencies investigate the February cyber theft of $81 million from the Bangladesh central bank account at the New York Federal Reserve Bank. Swift has acknowledged that the scheme involved altering Swift software on Bangladesh Bank’s computers to hide evidence of fraudulent transfers.

    Yesterday’s statement from Swift marked the first acknowledgement that the cyber attack on the New York Federal Reserve Bank was not an isolated incident but one of several recent criminal schemes that aimed to take advantage of the global messaging platform used by some 11,000 financial institutions.

    “Swift is aware of a number of recent cyber incidents in which malicious insiders or external attackers have managed to submit Swift messages from financial institutions’ back-offices, PCs or workstations connected to their local interface to the Swift network,” the group warned customers.

    The warning, which Swift issued in a confidential alert sent over its network, did not name any victims or disclose the value of any losses from the previously undisclosed attacks.

    Swift, or the Society for Worldwide Interbank Financial Telecommunication, is a co-operative owned by 3,000 financial institutions. Also, Swift released a security update to the software that banks use to access its network to thwart malware that security researchers with British defense contractor BAE Systems said was probably used by hackers in the Bangladesh Bank heist.

    Cyber security experts said more attacks could surface as SWIFT's banking clients look to see if their SWIFT access has been compromised.

    Shane Shook, a banking security consultant who investigates large financial crime, said hackers were turning to SWIFT and other private financial messaging platforms because such attacks can generate more revenue than going after consumers or small businesses.

    "These hacks specifically target financial institutions because smaller efforts result in much larger thefts," he said. "It's much more efficient than stealing from consumers."
    Full Reuters article is here


    We have for some time warned of the risks posed by cyber fraud and war to banks, savings and indeed investments. The apparent theft of $81 million from a central bank from an account at the New York Federal Reserve shows this.
    Cyber theft is a real risk for all digital or virtual wealth today – whether that be digital bank accounts and deposits or electronic stock and other exchanges.

    Fintech solutions involving the vitally important blockchain cometh and not before time. However, many of these solutions are also vulnerable in the short term as the nascent industry grows and the best solutions survive and thrive and less safe ones are slowly found out by the market and disappear.

    The risks posed to bank deposits, markets and indeed all online investments and savings by hacking, cyberterrorism and cyberwar remains not understood.


    Given these real risks, tangible gold becomes not important but a vital means of preserving wealth. Physical gold coins and bars, due to their tangible nature, are not vulnerable to crises that may afflict electronic digital currency and other digital wealth.

    Those who hold physical gold and silver coins and bars outside the banking system as an insurance policy would certainly weather the storm better than those who do not.
    The hope is that these risks will not materialise. Hope is not a strategy. We believe it is prudent to be aware of and take appropriate measures to protect your wealth.
    Our modern western financial system with its massive dependency on single interface websites, servers and the internet faces serious risks that few analysts have yet to appreciate and evaluate. These also pose risks to digital gold providers who do not allow clients to interact and trade on the phone and are solely reliant on online trading platforms.

    Jim Rickards, the leading expert on currency wars and risks posed by cyber fraud to people's, company's and indeed nation's wealth commented to GoldCore about the cyber theft:

    "Bangladesh is one of the poorest countries in the world. $100 million of their money disappeared. The money was on deposit with the Federal Reserve Bank of New York, the safest bank in the world. The culprits hacked SWIFT, one of the most secure message traffic systems in the world. If the Fed and SWIFT aren't safe, nothing is safe. If Bangladesh had held physical gold, they would still have their money. The case for owning gold in an age of cyber-financial threats is compelling."




    G20 Conspiracy Theory: The Secret "Shanghai Accord" to Kill the U.S. Dollar


    By Money Morning Staff Reports, Money Morning • April 6, 2016




    The ECB’s Mario Draghi attended the Shanghai Accord.

    A new conspiracy theory emerged after February's famed G20 Summit of the world's economic policymakers and leaders.

    It even has a name: The "Shanghai Accord" conspiracy theory.

    As it goes, the alleged Shanghai Accord was a side meeting of only a handful of economic policymakers (in Shanghai – hence the name) that took place concurrently with the G20 Summit on Feb. 26.

    Attendees of the clandestine powwow included U.S. Federal Reserve Chair Janet Yellen, U.S. Secretary of the Treasury Jack Lew, Christine Lagarde from the IMF, Mario Draghi from the ECB, and central bank and finance ministry counterparts from China and Japan.

    The chief reason for the Shanghai Accord was to allow these choice global policymakers a chance to plan the demise of the U.S. dollar.

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    Saudis, China Dump Treasuries; Foreign Central Banks Liquidate A Record $346 Billion In US Paper

    by Tyler Durden
    Oct 18, 2016 4:54 PM

    One month ago, when we last looked at the Fed's update of Treasuries held in custody, we noted something troubling: the number dropped sharply, declining by over $27.5 billion in one week, the biggest weekly drop since January 2015, pushing the total amount of custodial paper to $2.83 trillion, the lowest since 2012.

    One month later, we refresh this chart and find that in the latest weekly update, foreign central banks continued their relentless liquidation of US paper held in the Fed's custody account, which tumbled by another $22.3 billion in the past week, pushing the total amount of custodial paper to $2.805 trillion, another fresh post-2012 low.




    Then today, in addition to the Fed's custody data, we also got the latest monthly Treasury International Capital data, which showed that the troubling trend presented last one month ago, has accelerated. Recall that a month ago, we reported that in the latest 12 months we have observed a not so stealthy, in fact quite massive $343 billion in Treasury selling by foreign central banks in the period July 2015- July 2016, something truly unprecedented in size and scope.

    Fast forward to today when in the latest monthly update, that of July, we find that what until a month ago was "merely" a record $343 billion in offshore central bank sales in the LTM period ending July 30, one month later this number has risen to a new all time high $346.4 billion, or well over a third of a trillion in Treasuries sold in the past 12 months.



    Among the biggest sellers - on a market-price basis - not surprisingly was China, which in July "sold" $34 billion in US paper (the actual underlying number while different, as this particular series is adjusted for Mark to Market variations, will be similar), the biggest monthly dump going back to 2012, and bringing its total to $1.185 trillion, the lowest total since 2012.



    It wasn't just China: Saudi Arabia also continued to sell its TSY holdings, and in August its stated holdings (which again have to be adjusted for MTM), dropped from $96.5BN to $93Bn, the lowest since the summer of 2014.



    As we pointed out one month ago, what is becoming increasingly obvious is that both foreign central banks, sovereign wealth funds, reserve managers, and virtually every other official institution in possession of US paper, is liquidating their holdings at a very troubling pace. In some cases, like China, this is to offset devaluation pressure; in others such as Saudi Arabia, it is to provide the funds needed to offset the collapse of the petrodollar, and to backstop the country's soaring budget deficit.

    So who are they selling to? The answer, at least for now, is private demand, in other words just like in the stock market the retail investor is the final bagholder, so when it comes to US Treasuries, "private investors" both foreign and domestic are soaking up hundreds of billions in central bank holdings. We wonder if they would do that knowing who is selling to them.

    Meanwhile, while just two months ago yields had tumbled to near all time lows, suddenly the picture is inverted, and long-yields are suddenly surging on concerns the BOJ, the Fed, and maybe even the ECB will soon taper their purchases of the long end.

    What happens if in addition to the relentless selling from foreign official institutions, private sellers also declare a buyer's strike. The answer?

    More Fed monetization of US debt will be the most likely outcome, aka more QE. We bring this up because, amusingly, the Fed is still harboring some naive hope it can/will raise rates in the coming week and/or months.

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    Long time U.S. vassal state Japan to bypass dollar and SWIFT to transact using China's CIPS system in inter-bank settlement

    9:22 AM

    Ever since China began to duplicate Western financial institutions starting in 2013, more and more nations have begun matriculating towards the East, and away from dollar hegemony. And one of the most important of these new infrastructures is the Chinese CIPS platforms which functions for the RMB the same way SWIFT does for the dollar.

    Yet unlike the way SWIFT charges for swaps when nations have to use the dollar as a middleman since it still reigns as the world's singular reserve currency, CIPS allows for much lower transaction fees and the convenience of bypassing the U.S. currency through direct bi-lateral currency settlement.


    Hiroshima Bank and 13 other Japanese regional banks will connect to an interbank payment network that enables direct yuan wiring to mainland China -- a move that will lower transaction fees and boost convenience for customers.
    Joining the China International Payments System will reduce fees and processing days. Juroku Bank and Joyo Bank are also among the Japanese banks taking advantage of the system introduced by the People's Bank of China. They will be connected one by one after the end of the Chinese New Year holidays via the Bank of Tokyo Mitsubishi UFJ, which connected to the system last year.
    Previously, payments to mainland China had to be processed by clearing banks such as those in Hong Kong. CIPS can cut costs by several dollars (10 yuan equals $1.45) per transaction. Payments can be completed on the same day if certain conditions are met. – Asia.Nikkei
    As the world continues to reject the dollar and the old financial model of a singular reserve currency, more countries are seeing the benefits of transacting in a bi-lateral environment. And once enough of these nations decides to follow this new economic model being laid out from Beijing, and create the critical mass needed to bypass the dollar completely, then the reserve currency will simply fade away via de facto consent, and force change onto the Western institutions that have run the global financial system for decades.

    http://www.thedailyeconomist.com/201...-japan-to.html

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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    World Dumping US Debt & Hoarding Gold: De-dollarization Explained

    In a special extended segment, Anya Parampil is joined by In Question producer Kei Pritsker, who explains why Russia, China, India, Japan, Turkey, Venezuela, and Iran have all made moves away from the dollar, including dumping their holdings of US debt and increasing their respective gold reserves.


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    Default Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol

    EU plans to do all oil transactions with other states in euros: Iran

    Thu Dec 6, 2018 02:56PM [Updated: Thu Dec 6, 2018 03:33PM]
    The European Union plans to use its own currency instead of the US dollar in all oil deals with other states. (Photo by Bloomberg)
    The European Union is going to ditch the US dollar and use its own currency in oil contracts worth 300 billion euros, an Iranian official said, quoting a European commissioner.

    釘ased on the news I recently received and was confirmed by a European commissioner, from now on, the EU is going to ditch the US dollar and just use the euro in the financial transactions of all European oil deals with other countries, said Iran痴 nuclear chief, Ali Akbar Salehi, on Thursday.

    Speaking to reporters, the head of the Atomic Energy Organization of Iran (AEOI) said the amount of these transactions is more than 300 billion.

    撤reviously, the EU used to pay 85 percent of the money for the oil it purchased from other countries in US dollars, but now with this new mechanism, all the money will be paid in euros, he said.

    Once the mechanism takes effect, the US dollar will be isolated as a global currency, and the US will no longer be able to use dollars in the current dominating way, Salehi added.

    His comments came one day after the EU commission presented its plan to reduce the dollar's overwhelming dominance of the global economy and to strengthen the role of the euro, particularly for energy transactions.

    European capitals are increasingly frustrated with the global dominance of the dollar as a reserve currency, which hands the United States unparalleled diplomatic and economic power in a globalized world.

    Governments, banks and multinationals are at the mercy of US authorities, which have the legal power to switch off access to the world economy if any company or country runs afoul of Washington.

    "In the current context of incertitudes trade conflicts, extra territorial sanctions by the US the market participants are looking for alternative," said EU economics affairs commissioner Pierre Moscovici at a news conference in Brussels.


    PressTV-EU promotes euro to stop dollar dominance

    The EU commission presented its plan to reduce the dollar's overwhelming dominance of the global economy.

    The single currency born on January 1, 1999 "should reflect the political, economic and financial weight of the eurozone", the single currency bloc of 19 EU countries, said European Commission Vice-President Valdis Dombrovskis.

    The share of the euro in global holdings of foreign exchange reserves currently stands at around 20 percent, according to the commission. The US dollar, by comparison, is over 60 percent.

    After a strong start, the international stature of the euro suffered greatly during the eurozone debt crisis as the financial markets lost faith in the single currency.

    The most frustrating recent example for the EU is Iran, where international companies that choose to trade with or invest despite US sanctions are vulnerable to punishment by Washington if they use the dollar.

    In order to resolve the issue, Europe has promised to establish the Special Purpose Vehicle (SPV), a mechanism which is supposed to bypass US sanctions against Tehran.


    PressTV-US using dollar as weapon to pressure Europe: Iran

    The US government has been using dollar as a weapon to force other countries into supporting its policies, says an Iranian diplomat.

    SPV to be launched by year-end

    In his Thursday remarks, Iran痴 nuclear chief expressed hope that the SPV will be in place by the end of December.

    It is not easy to build consensus among 27 members of the European Union, he said, quoting European officials as saying that they are doing their best to finalize the mechanism, and that its development is in its final stages.

    釘ased on the pledges that the Europeans have made, we hope that Europe痴 proposed package would become operational by the end of the current year, Salehi added.


    PressTV-Iran's patience running out on EU pledges: Salehi

    Iran's nuclear chief warns the European Union that Tehran's patience is running out on the bloc's lack of delivery on its economic pledges.

    Salehi痴 comments echoed Wednesday remarks by Iranian Foreign Minister Mohammad Javad Zarif who also quoted Europeans as saying that the SPV will be launched very soon.

    典he Europeans told me in Geneva, and my colleagues in Brussels, that the final arrangements for the SPV have been made, Zarif said, but at the same time noted that the EU has kept the process confidential for fear of the US which may disrupt the SPV if it is made aware of the details.

    In a Tuesday report, Al-Monitor quoted European sources as saying that the SPV will be announced in January.

    的t is likely that it will be used initially to facilitate trade in food and medicine and consumer goods to avoid attracting unwanted scrutiny from the US Treasury Department, the report said.

    典he Europeans have indicated that other countries may be welcome to join the SPV or that there may be multiple SPVs for different types of trade, it added.

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    Nikita Khrushchev: "We will bury you"
    "Your grandchildren will live under communism."
    添ou Americans are so gullible.
    No, you won稚 accept
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    outright, but we値l keep feeding you small doses of
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    until you値l finally wake up and find you already have communism.

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    ."
    We値l so weaken your
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    until you値l
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    like overripe fruit into our hands."



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