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

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Thursday, December 6, 2012

Twilight of the Petrodollar, nightmare to follow

In 1973, two years after President Richard Nixon dislodged gold from beneath the US Dollar, making it a baseless fiat currency, Secretary of State Henry Kissinger struck a deal with King Saud of Saudi Arabia whereby all oil transactions with any country were to be via the US Dollar only, thus making it the "Petrodollar", in exchange for US protection against the Soviet Union and other covetous Arab neighbors, who, not long afterwards, all fell in line. This, in addition to the 1944 international conference which established the US Dollar as the "World Reserve Currency", gave the US global economic hegemony on an unprecedented scale, where all countries needing to buy or sell oil were obligated to accumulated huge amounts of US dollars, bonds and treasuries, which raised the Dollar to Money-God status.

This worked well for several decades, when there were few if any global economic contenders. Even the powerful Yen bowed down to the Almighty Dollar, though faint murmurs of discontent have been heard from various quarters. "We have our own stable currency. Why can't we trade in oil directly with it?", which is exactly what China, Russia the EU, the UAE, India, Iran, Brazil, and a host of other countries are saying today. And can we blame them? How would Americans feel if they were told that they could not use the Dollar for buying oil, but were required to used the Russian Rouble or the Chinese Yuan?

In the last three years, China alone has made bilateral agreements with a number of powerful economies on trading with their own currencies rather than through the US Dollar:

- with Russia (Nov. 2010)
- with Japan (Dec. 2011)
- with Australia (Mar. 2012)
- with the UAE (Mar. 2012)
- with Brazil, India, Russia and South Africa (Mar. 2012)
- with Brazil (Jun. 2012)
- with Chile (Jun. 2012)
- with Germany (Aug. 2012)
- with most oil producing and consuming countries (Sep. 2012)

Obviously, all of these countries consider this fair and square - to themselves and each other.

Except the United States, of course, for which, if it develops into a runaway situation, would be a disaster. It is not as much a matter of losing prestige or power, which are luxuries, but of value, which is downright a matter of economic survival. When those countries currently holding vast quantities of dollars no longer need them, they would sell it, and where else except back to the US. If/when this happens, the Dollar will plunge. This in itself may not be lethal, but when the system is already at the "Fiscal Cliff" domestically, a nudge from beyond could just push the economy over the edge.

Are these countries doing this for themselves, or against the US? A bit of both perhaps, but I think more the former - the long suppressed finally standing up for themselves. A stabilizing factor is that China still holds close to $2 trillion in USD, and Japan $1 trillion. If the Dollar gets wiped out, they too stand to lose, and lose big. The thing to look for is if/when they begin making moves to dump the USD in a big way; then, the "shit will hit the fan".

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Putin Turns Black Gold to Bullion as Russia Outbuys World


By Scott Rose & Olga Tanas - Feb 11, 2013 6:42 AM CT

When Vladimir Putin says the U.S. is endangering the global economy by abusing its dollar monopoly, he’s not just talking. He’s betting on it.

Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer. His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty.



Russia's Prime Minister Vladimir Putin, center, holds a gold bar while visiting the Central Depository of the Bank of Russia. Photographer: Alexsey Druginyn/AFP/Getty Images

“The more gold a country has, the more sovereignty it will have if there’s a cataclysm with the dollar, the euro, the pound or any other reserve currency,” Evgeny Fedorov, a lawmaker for Putin’s United Russia party in the lower house of parliament, said in a telephone interview in Moscow.

Gold, coveted by Russian rulers including Tsar Nicholas II and the Bolshevik leader whose forces assassinated him, Vladimir Lenin, has soared almost 400 percent in the period of Putin’s purchases. Central banks around the world have printed money to escape the global financial crisis, sapping investor appetite for dollars and euros and setting off a scramble for safety.

In 1998, the year Russia defaulted on $40 billion of domestic debt, it took as many as 28 barrels of crude to buy an ounce of gold, data compiled by Bloomberg show. That ratio tumbled to 11.5 by the time Putin first came to power a year later and in 2005, after it touched 6.5 -- less than half what it is now -- the president told the central bank to buy.

Putin’s Call

During a tour that November of the Magadan region in the Far East, where Polyus Gold International Ltd. and Polymetal International Plc have operations, Putin told Bank Rossii not to “shy away” from the metal. “After all, they’re called gold and currency reserves for a reason,” Putin said, according to a Kremlin transcript.

At the time, gold was at an 18-year high of $495 an ounce and the Moscow-based central bank held 387 tons, or 2.2 percent of its $165 billion total reserves. The share reached 3.5 percent within a month, according to data compiled by Bloomberg.

Gold for immediate delivery fell a third day today, dropping 0.6 percent to $1,657.80 an ounce as of 4:35 p.m. in Moscow. It rose 7 percent last year, the 12th straight year of gains.

Analysts expect the metal to advance again in 2013, to $1,825 by the end of the year, according to the median of 26 forecasts in a Bloomberg survey.

Dmitry Peskov, Putin’s spokesman, declined to comment today on Putin’s interest in gold.

Lucky Guy

“Putin’s gold strategy fits in with his resource nationalism, statist agenda,” said Tim Ash, head of emerging- market research at Standard Bank Plc in London. “It’s kind of a defensive play, but it worked, right?” Ash said in an interview in Moscow. “You need luck in politics and business, and clearly the guy has it.”

Other world leaders haven’t been as lucky. Gordon Brown, as U.K. finance minister, sold almost 400 tons of gold in the 30 months to March 2002, when prices were at two-decade lows. London tabloids have referred to the period as Brown’s Bottom.

Quantitative easing by major economies to support financial asset prices is driving demand for gold in the emerging world, said Marcus Grubb, head of investment research at the World Gold Council. Before the crisis, central banks were net sellers of 400 to 500 tons a year. Now, led by Russia and China, they’re net buyers by about 450 tons, Grubb said by phone from London, where his industry group is based.

‘Significant Switch’

“That’s a very significant switch, and obviously a very positive one for the gold market,” Grubb said.

While Putin is leading the gold rush in emerging markets, developed nations are liquidating.

Switzerland unloaded the most in the past decade, 877 tons, an amount now worth about $48 billion, according to International Monetary Fund data through November. France was second with 589 tons, while Spain, the Netherlands and Portugal each sold more than 200 tons.

Even after Putin’s binge, though, Russia’s total cache of about 958 tons is only the eighth largest, the World Gold Council said in a Feb. 8 report. The U.S. is No. 1 with about 8,134 tons, followed by Germany with 3,391 tons and the Washington-based IMF with 2,814 tons. Italy, France, China and Switzerland are fourth through seventh. While gold accounts for 9.5 percent of Russia’s total reserves, it accounts for more than 70 percent in the U.S., Germany, Italy and France.

Truth Street

Russia keeps about two-thirds of its stockpile in a greenish gray stone-and-glass building on Ulitsa Pravdy, or Truth Street, in central Moscow. The road is named after Pravda, the official newspaper of the Communist Party, which also was headquartered there.

Then-Prime Minister Putin became the first Russian leader to visit the complex on Jan. 24, 2011, according to the government’s website. He toured the 17,000 square-meter facility, which includes 1,500 square meters of storage, with First Deputy Chairman Georgy Luntovsky, posing for photographs lifting an ingot. Most of the bars weigh 10 to 14 kilograms (22 to 31 pounds) and are boxed in plastic or wooden crates alongside an emergency supply of banknotes.

Technically, state metals depositary Gokhran has the exclusive right to buy all gold mined in the country. In practice, it lets commercial banks buy from producers directly, usually in the form of project financing, said Sergey Kashuba, chairman of the Russian Union of Gold Producers in Moscow.

When the central bank buys gold, it’s from those commercial banks, led last year by OAO Sberbank, OAO Nomos Bank, VTB Group and OAO Gazprombank, Kashuba said. Russia produced 205 tons of gold last year, making it No. 4 after China, Australia and the U.S., according to U.S. Geological Survey estimates.
Tight Security

Security is tight along the entire production chain, Kashuba said. Just two organizations are allowed to move partially refined gold from miners in the Far East and northern Siberia to processing facilities in other parts of the country, he said. One is FeldSvyaz, a courier service that reports directly to Putin. The other, SpetsSvyaz, was split off from Stalin’s NKVD secret police in 1939 to transport precious metals and state secrets, according to its website.

Russia has gone through bouts of hoarding before. Tsar Alexander II ordered his government to start amassing bullion in 1867, just months after selling Alaska, now the No. 2 gold- producing U.S. state, for $7.3 million. His grandson, Nicholas II, introduced the gold standard in 1897, then needed a loan from France to ward off speculators and save the system in 1906.

Lenin’s Link

Nicholas, Russia’s last tsar was forced to free the ruble in 1914 as war broke out in Europe. Lenin’s revolutionary government reinstated the gold link along with a new currency in 1922. While Soviet rubles were nominally backed by gold, sales of the metal to citizens were halted in 1930, making the peg meaningless.

When Lenin’s Bolsheviks seized power in Petrograd, as St. Petersburg was then known, in 1917, one of their first targets was the State Bank and its gold, which they captured at 6 a.m. on Nov. 7, according to Bank Rossii’s website. They soon nationalized all the banks, confiscating any gold found in vaults and deposit boxes.

Communist Secrecy

Communist secrecy regarding the country’s gold holdings fueled speculation that party elites had amassed a huge hoard of bullion that they spirited out of the country before the Soviet Union disintegrated in 1991.

Viktor Gerashchenko, the last Soviet central banker and a two-time chairman of Bank Rossii, has repeatedly denied such speculation, including last February.

“When people ask about the party’s gold, my answer is always: Are you an idiot or something?” Gerashchenko, 75, told Afisha magazine.

For now, with more than five years left in Putin’s term, Russia plans to keep on buying.

“The pace will be determined by the market,” First Deputy Chairman Alexei Ulyukayev said in an interview in Davos, Switzerland, on Jan. 25. “Whether to speed that up or slow it down is a market decision and I’m not going to discuss it.”

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CURRENCY WARS ARE HERE


hold your silver tight.
First let´s talk about Argentina. Simon says:

February 12, 2013
Buenos Aires, Argentina

Selling snake oil and issuing unbacked paper currency are not so different. They're both wildly successful ploys for the guys pulling the strings. And they're both complete scams that depend solely on the confidence of a willing, ignorant public.

But once the confidence begins to erode, the fraud unravels very, very quickly, and the perpetrators resort to desperate measures in order to keep the party going.

In the case of fiat currency, governments in terminal decline resort to a very limited, highly predictable playbook in which they try to control... everything... imposing capital controls, exchange controls, wage controls, price controls, trade controls, border controls, and sometimes even people controls.

These tactics have been used since the ancient Sumerians. This time is not different.

Today, Argentina presents the most clear-cut example. Here the 'mafiocracy' unites organized crime, big business, and politicians to plunder wealth from Argentine citizens. Just since 2010, President Cristina Fernandez has--

* Nationalized private pensions, plundering the retirement savings of her people.

* Increased tax rates across the board-- income, VAT, import duties, etc. as well as imposed a new wealth tax.

* Inflated Argentina's money supply, printing currency with wanton abandon; M2 money supply has increased 215% in the past three years.

* Driven the value and purchasing power of the currency down by 50%. Street-level inflation is now 30%+ per year.

* Made a mockery of official statistics, comically understating the level of Argentine inflation and unemployment. She even began punishing economists for publishing private estimates of inflation that didn't jive with the government figures.

* Taken over control of one industry after another, most notably the nationalization of Spanish oil firm YPF's Argentine assets.

* Imposed export controls of agriculture products from beef to grains, forcing growers to sell at artificially lower domestic prices.

* Imposed capital controls, reducing her citizens' capability to dump their poorly performing currency and hold gold, dollars, euros, or anything else.

* Imposed a two month 'price freeze' on items in the supermarket, and encouraged retail consumers to rat out any grocer that doesn't abide by the government order.

* Imposed controls over the media, most recently ordered an advertising ban in Argentine newspapers (weakening their financial position).

Cristina's policies here are leading to shortages in everything from food to fuel to electricity. Hardly a month goes by without major strikes and disruptions to public services. The purchasing power of their currency is diminishing rapidly. And most people are completely trapped.

Of course, there were a handful of people who saw the writing on the wall. They learned the important lesson never to trust their government. They moved their savings to stable foreign banks. They purchased property abroad. They bought gold and silver, and stored it overseas. They were prepared when the plundering began.

The developed West is rapidly heading down this path. Europe is beginning to impose capital controls, and the IMF has sanctioned them. The US is rapidly printing its currency into oblivion, and confidence is eroding quickly. Russia just purchased an historic amount of gold, choosing real assets over more US dollar reserves.

It would be foolish to think the same things can't happen in the West. And even if it never happens, would you be any worse off for taking some of these basic steps?



Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com


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now let´s move to Japan. They are in full retard money printing. Say goodbye to "deflation" times

they want to blow up Nikkei up to 17% in 30 days. Oh yeah, japanese go hardcore( latin) style inteventionism!


MA – Economic and fiscal policy minister Akira Amari said Saturday the government will step up economic recovery efforts so that the benchmark Nikkei index jumps an additional 17 percent to 13,000 points by the end of March.
“It will be important to show our mettle and see the Nikkei reach the 13,000 mark by the end of the fiscal year (March 31),” Amari said in a speech.

The Nikkei 225 stock average, which last week climbed to its highest level since September 2008, finished at 11,153.16 on Friday.

“We want to continue taking (new) steps to help stock prices rise” further, Amari stressed, referring to the core policies of the Liberal Democratic Party administration — the promotion of bold monetary easing, fiscal spending and greater private sector investment.

Amari said the Nikkei’s recent surge translates into combined share appraisal gains of some ¥38 trillion among domestic corporations, including financial institutions.

The key index started rallying from around 8,600 points in mid-November when then-Prime Minister Yoshihiko Noda decided to hold a general election Dec. 16 that saw his ruling Democratic Party of Japan trounced by the LDP. Share prices have risen largely in response to the yen’s depreciation against other major currencies on expectations for aggressive monetary easing measures by the Bank of Japan since the LDP’s return to power.

source: http://www.japantimes.co.jp/news/201.../#.URo9m2ckppH


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Chavez has made his move:

Venezuela announces widely expected currency devaluation, cutting bolivar's value nearly half


Read more: http://www.foxnews.com/world/2013/02...#ixzz2KgovVkhy



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HOLLANDE , FRENCH PRESIDent has hit the PANIC BUTTON:

Strasbourg, France (dpa) - French President Francois Hollande on Tuesday called for the creation of a eurozone exchange rate policy, saying the current strong euro was further penalizing struggling European economies.

Europe was "leaving the euro vulnerable to irrational movements," he told the European Parliament in Strasbourg.

"We cannot allow it to fluctuate as markets see fit," he said, warning that countries that had taken steps to become more competitive risked having the gains wiped out by a strong euro.

A monetary zone "must have an exchange rate policy," Hollande added. dpa cfb ncs

READ IT? "MUST"? they are totally scared.
http://en.europeonline-magazine.eu/e...es_262599.html


YEAH ! governments are getting ready. so keep stacking. I guess money will flow back to the US, stocks and real things like gold and silver.
keep watching the markets. and keep stacking.

Strongman out

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Monday, February 18, 2013

Bye Bye Dollar .. Hello Yuan .. So it begins ...




Related articles: Trade .. Chinese Yuan taking it slow to avoid more of this? ..

*US banks shaken by biggest fund withdrawals since 9/11. ..

Also .. *Internationalizing The RMB .. Chinese Yuan .. Past Articles Of Interest .....

more ..* *Links ~ CNH and China's Currency.

and .. *China, Taiwan Sign Yuan-Clearing Deal.

and ..*China's yuan trade starts in Taiwan in sign of warmer ties.

and .. recent ..**China plays by its own rules while going global

Also, .. link ..*Bank of England ready to set up yuan swap line ..

and previous articles link *IMF ~ SDRs and the U.S. Dollar ... Articles of Interest ...

and .. link *IMF's SDR Basket ~ India, China favour rupee, yuan inclusion in SDR basket

Special thank you to Tim for the heads up on this 3 days ago ....

USD/CNH Futures to Launch February 25, 2013*LINK...

February 18, 2013

Ok...we are seeing this starting with Yuan trading in banks world wide at this time...

This will mark the beginning of the official end of the US dollar.

Watch for nations dumping the dollar which will will lead to rampant inflation.

This will first be seen in gasoline prices and then reflected in all products market wide.

Food and fuel...will become so high priced that public outrage will pour into the streets.

This may start slow but if we as a nation (the United States) suffer any catastrophic military set backs anywhere in the world the process of "dollar dumping" by foreign nations will become frenzied to the point that we may see an overnight meltdown of the US economy.

Now people...is the time...to have a plan...and plan to act. Phoenix


Current financial crisis predicted in 1981 movie Rollover




__ More Info. Below__


TO: Clearing Member Firms; Back Office Managers
FROM: CME Clearing
DATE: February 6, 2013 (and updated February 13, 2013)
ADVISORY #: 13-062 Revised
SUBJECT: Updated: New Standard-Size and E-Micro-Size U.S.
Dollar/Offshore Chinese Renminbi USD/CNH Futures to
Launch, Sunday, February 24, 2013
______

UPDATE – Important clarification: The currency market uses CNY as the currency code for the “onshore” Chinese Renminbi Yuan, and CNH as the currency code for the “offshore” Renminbi, typically held in Hong Kong.

The new futures contracts described herein are denominated in CNH, the offshore Renminbi, and CME’s clearing reports and datafiles will show the currency code as CNH.

Usage in the industry is not entirely consistent, however, and your settlement and/or delivery bank for the offshore Renminbi may refer to it using the currency code of CNY.

Also please note that SWIFT requires CNY as the currency code for both the onshore and the offshore Renminbi.

This advisory describes CME’s new physically delivered FX futures on the exchange rate between the US Dollar and the Offshore Chinese Renminbi.

These are referred to as Standard USD Offshore Renminbi (USD/CNH) Futures and E-micro USD Offshore Renminbi (USD/MNH) Futures.

The Globex and clearing product codes for the two new futures are CNH and MNH,
respectively.

Effective on Sunday, February 24, 2013, for the trade date of Monday, February 25, 2013, CME is launching new Standard-size and E-micro-size
U.S. Dollar/Offshore Chinese Renminbi (USD/CNH) Futures contracts on CME Globex and CME ClearPort.

These futures contracts feature physical delivery of Offshore Chinese Renminbi (CNH), priced in interbank terms of Offshore Chinese Renminbi per U.S. dollar with associated daily settlement variation banked in Offshore Chinese Renminbi, and fungible (offsetting) on a 10 to 1 basis between the micro and the full-sized contracts.

*Link ..

related articles .. Link .. *Links ~ Dumping The Dollar

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IMF Stole 10% of Putin's money, how will he get even?

This has to be the wildest unintended consequence in history.

My Dear Extended Family,

Courtesy of KingWorldNews.com



Today legendary trader Jim Sinclair told King World News we have just witnessed one of the most important events in history and it will have a major impact on the gold market. Below Sinclair, who's father was business partners with legendary trader Jesse Livermore, had to say in this extraordinary and exclusive KWN interview:

"The wire reports on the Cyprus situation are working overtime to try to make the case that 80% of the deposits belong to the people of Cyprus, and only 20% of the deposits belong to the Russians. That's absolutely false. After 1985, when the 'Robber Barrons' of Russia took over the general economics of Russia, that was the transformation from the KGB to private business. The primary place for exported Russian funds was Cyprus.

Now, there is one leader in the world that would be very dangerous to challenge, and that is Putin of Russia....

"What's just happened is the IMF has backed up, lauded, supported, and publicized, as if it were a victory, the taking of 10% of what really turns out to be 80% of Russian 'black money.' Russian 'black money' is KGB money, now in business. The leader of Russia (Putin) was a former KGB official. Who's money do you think they have taken? This is the biggest mistake the IMF could possibly have ever made."

Eric King: "Jim, it's unimaginable to me, but, incredibly, just ten days ago you warned that you don't want to anger Russian leader Putin because he and Russia will punish the West in the gold market. Can you talk about how this is going to impact the gold market beginning on Monday?"


Sinclair: “What would you rather have, an insured bank account by the BIS, FDIC, ECB, when any government can come in and take 10% of your account and treat that as if you are paying a tax for monies that were lost because of devious actions by the banks themselves, or gold?”

Eric King: “Will the Russians take their revenge in the gold market? Is that one of the places they will seek revenge?”

Sinclair: “The answer is that this is one of the most important events in modern times for the popularity of holding gold rather than holding fiat money. This is the catalyst that will propel gold through the $1,600 level. To prevent a break above $1,600 in gold would take extraordinary efforts on the part of any manipulator in the marketplace.

It’s very dangerous in doing business with the Russians, to lose their money. Revenge will be very much a part of the motivation for what happens from this point forward. This type of event will take us out of the $1,500s and we may never see those prices again in our lifetimes.”

IMPORTANT - Jim Sinclair is holding a meeting in New York this coming Wednesday, March 20th at 2 PM EST. For details and to sign up to attend this event CLICK HERE.

UPDATE - The incredible KWN audio interview with the former US Treasury official Dr. Paul Craig Roberts is available now and you can listen to it by CLICKING HERE.

© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.

The interviews with Dr. Paul Craig Roberts, Egon von Greyerz, Rob Arnott, James Turk, Jim Sinclair, John Embry, Gerald Celente, Rick Rule, Ben Davies and Andrew Maguire are available now. Also, be sure to listen to the other recent KWN interviews which included Marc Faber, Felix Zulauf and Art Cashin by CLICKING HERE.


Click here to read the full interview on KingWorldNews.com

[Ryan Ruck]

China "Fully Prepared" For Currency War: Banker

March 2, 2013

A top Chinese banker said Beijing is "fully prepared" for a currency war as he urged the world to abide by a consensus reached by the G20 to avert confrontation, state media reported on Saturday.

Yi Gang, deputy governor of China's central bank, issued the call after G20 finance ministers last month moved to calm fears of a looming war on the currency markets at a meeting in Moscow.

Those fears have largely been fuelled by the recent steep decline in the Japanese yen, which critics have accused Tokyo of manipulating to give its manufacturers a competitive edge in key export markets over Asian rivals.

Yi said a currency war could be avoided if major countries observed the G20 consensus that monetary policy should primarily serve as a tool for domestic economy, the Xinhua report said.

But China "is fully prepared", he added.

"In terms of both monetary policies and other mechanism arrangement, China will take into full account the quantitative easing policies implemented by central banks of foreign countries."

South Korea's incoming president Park Geun-Hye has also signalled her willingness to step in to stabilise the won and protect exporters battling a stronger Korean currency and a weaker yen.

[Ryan Ruck]

So Long, Yankees! China And Brazil Ditch US Dollar In Trade Deal Before BRICS Summit

March 26, 2013



China and Brazil agreed to trade in each other’s currencies just hours ahead of the BRICS summit in South Africa.

The deal, which extends over a three-year period and amounts to an exchange of about $30 billion in trade per year, marks the latest effort among two of the world’s largest emerging economies to shift the dynamics of international trade that have long favored the U.S. dollar.

"Our interest is not to establish new relations with China, but to expand relations to be used in the case of turbulence in financial markets," Brazilian Central Bank Governor Alexandre Tombini said, Reuters reported.

By shifting some trade away from the U.S. dollar, the world’s primary reserve currency, the two countries aim to buffer their commercial ties against another financial crisis like the one that resulted from the collapse of the U.S. housing market bubble in 2008.

"Trade ties between China and Brazil are of great importance to the two countries' economies amid global woes and the member states' economic stability is vital for the BRICS mechanism," said Zhou Zhiwei, a researcher with the Chinese Academy of Social Sciences, Xinhua reported.

Trade between China and Brazil has exploded in recent years from $6.68 billion in 2003 to over $75 billion in 2012, and in 2009, China replaced the U.S. as Brazil’s main trading partner.

The trade deal comes before a summit of the BRICS nations (Brazil, Russia, India, China and South Africa) in Durban, where the group of five is expected to discuss the establishment of an international development bank.

"BRICS Development Bank will make the global financial sector more democratic," said Brazil's Minister for Development, Industry and Foreign Trade Fernando Pimentel, according to Xinhua.

China and has touted the proposed bank as an alternative to international financial institutions like the World Bank, which funds infrastructure and development projects in emerging economies around the world.

With a combined GDP of over $14 trillion, the BRICS is looking to expand its economic influence throughout African countries in particular.

"We are creating new axis of global development,” Anand Sharma, India's Minister of Commerce, Industry and Textiles, Xinhua reported. “The global economic order created several decades ago is now undergoing change and we believe for the better to make it more representative.”

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Putin's armed bodyguards fight with security at summit in South Africa after being told to put 'nuclear suitcase' through X-ray

• Russian president was attending BRICS summit in Durban
• Bodyguards ordered to scan suitcase containing nuclear launch codes
• Guards started 'pushing and shoving' after being told to leave summit
  

By Will Stewart

PUBLISHED: 09:03 EST, 27 March 2013 | UPDATED: 03:49 EST, 28 March 2013


Fight: Vladimir Putin's bodyguards were involved in a punch-up at the BRICS summit in South Africa

Armed guards from Vladimir Putin's entourage were involved in an ugly fight in South Africa after they were ordered to put top secret suitcases - believed to contain the codes for Russia's nuclear arsenal - through a security scanner.

The nightmare scenes came as the Kremlin leader arrived in Durban on an official trip to attend the 'BRICS' summit.

Angry 'pushing and shoving' broke out after some members of Putin's security detail were prevented from following the Russian president into the conference hall staging the summit, which was hosted by South Africa's president Jacob Zuma and also involved Brazil, Russia, India and China.

'Putin managed to go through their lines, but his closest security detail were ordered to put their small suitcases on the belt to X-ray check them,' Moskovsky Komsomolets revealed.

These were the 'very particular suitcases, secret ones, which are always carried right behind the president's back and the guards never let go even for a second,' the newspaper added.

'They tried to literally push out of the building a part of President's security service, part of his protocol service and part of Kremlin's information service.'

Scroll down for video


Conflict: A South African security guard pushes Putin's bodyguards out of the convention hall


Stand-off: The two sides argued about the security procedures for the concert

VIDEO: On camera. Putin's armed bodyguards fight with security at summit

Putin's bodyguards fight with security over 'nuclear secrets'...




At one point, heavy-handed South African security also tried to block Russian foreign minister Sergei Lavrov - one of the world's most senior diplomats - from entering, it was claimed.

Amid angry misunderstandings, it became physical with 'Putin's security pushing the Africans out of the away, and the Africans pushing Putin's back', said Russian journalist Victoria Prikhodko.

'I must say that the African security man was half the size of the Russian - but then he had a machine-gun in his hands which in the end helped him to push both our protocol and our security.'

When they tried to block Lavrov 'our security re-started the fight', she said. 'Luckily they didn't get into a full-size scuffle, ending up with pushing and poking each other.'


Arrival: Mr Putin after touching down at Durban's airport for the summit yesterday


Dinner: The Russian leader with China's Xi Jinping, Jacob Zuma of South Africa and Brazilian president Dilma Rousseff

A South African colonel was called and the issue was resolved with the Russians - and their sensitive suitcases - allowed in. Some were forced to use the back door.

Kremlin officials blamed the embarrassing bust-up on the South Africans, with Putin's spokesman Dmitry Peskov saying: 'They manage football better. A lot of confusion.'

He added: 'The incident happened because of the fault of the inviting side.'


Group: All five BRICS leaders, including Manmohan Singh of India, pose for a picture together today

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Thanks, World Reserve Currency, But No Thanks: Australia And China To Enable Direct Currency Convertibility

Submitted by Tyler Durden on 03/31/2013 12:46 -0400

• Australia
• Australian Dollar
• Brazil
• China
• Hong Kong
• India
• Iran
• Japan
• Renminbi
• Reserve Currency
• Treasury Department
• Yuan

A month ago we pointed out that as a result of Australia's unprecedented reliance on China as a target export market, accounting for nearly 30% of all Australian exports (with the flipside being just as true, as Australia now is the fifth-biggest source of Chinese imports), the two countries may as well be joined at the hip.



Over the weekend, Australia appears to have come to the same conclusion, with the Australian reporting that the land down under is set to say goodbye to the world's "reserve currency" in its trade dealings with the world's biggest marginal economic power, China, and will enable the direct convertibility of the Australian dollar into Chinese yuan, without US Dollar intermediation, in the process "slashing costs for thousands of business" and also confirming speculation that China is fully intent on, little by little, chipping away at the dollar's reserve currency status until one day it no longer is.

That said, this latest development in global currency relations should come as no surprise to those who have followed our series on China's slow but certain internationalization of its currency over the past two years. To wit: "World's Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade", "China, Russia Drop Dollar In Bilateral Trade", "China And Iran To Bypass Dollar, Plan Oil Barter System", "India and Japan sign new $15bn currency swap agreement", "Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says", "India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees", and "The USD Trap Is Closing: Dollar Exclusion Zone Crosses The Pacific As Brazil Signs China Currency Swap."

And while previously the focus was on Chinese currency swap arrangements, the uniqueness of this weekend's news is that it promotes outright convertibility of the Yuan: something China has long said would happen but many were skeptical it ever would. That is no longer the case, and with Australia setting the precedent, expect many more Asian countries (at first) to follow in Australia's footsteps, because while the developed world is far more engaged in diluting its currency as a means to spur "growth", Asian and developing world nations are still engage in real, actual trade, where China is rapidly and aggressively becoming the world's hub.

More from The Australian:

Former ambassador to China Geoff Raby, now a Beijing-based business figure, told The Weekend Australian: "The value of such a deal would be substantial for exporters to China, especially those that import a lot from China like mining companies, as it would remove business constraints including exchange-rate risks and transaction costs."

Businesses, like individuals when travelling, have to pay extra to convert currency since there are different rates for buying and selling.

So removing one step also cuts out the cost of paying for such a "spread".

Australia has undertaken significant lobbying for the deal and the direct conversion of the yuan, also referred to as the renminbi (RMB), is identified as a priority in the government's Asian century white paper.

"We have held preliminary discussions with the Chinese government to explore how soon direct convertibility can be practicably achieved," the white paper says.

"We are continuing these discussions, and also exploring other opportunities to work with China to support the internationalisation of the RMB."
Australia's banks increasingly arrange trade finance through Hong Kong, which has developed a special role as China's chief international finance centre.

Needless to say, China is eagerly looking forward to taking yet another bite out of the USD's reserve status.

New President Xi Jinping, a former Communist Party secretary of Shanghai, is a champion of that city's development as China's finance hub, and it is believed that the Prime Minister may fly there to sign the currency conversion deal.

Ms Gillard is expected to go on from Shanghai to Beijing, where she will open the third Australia China Economic and Trade Forum organised primarily by the Australia China Business Council, which will be bringing about 100 people from Australia for the event.

Participants are likely to include Andrew Harding, Rio Tinto's new chief executive for iron ore; Warwick Smith, ANZ Bank's chairman for NSW and the ACT; Australian Trade Minister Craig Emerson and Financial Services Minister Bill Shorten; Gao Hucheng, China's Commerce Minister; and Gao Xiqing, the acting head of China Investment Corporation, the country's vast sovereign wealth fund.

The ANZ Bank has been a strong advocate of direct convertibility between the dollar and the yuan. Gilles Plante, the bank's chief executive in Asia, said in a recent report that in the last financial year, China accounted for 29 per cent of all exports and 18 per cent of imports, but the value of that trade denominated in yuan was less than 0.3 per cent.

He forecast that cross-border flows of funds would be liberalised "to support Shanghai's plan to build itself as a global financial centre. At the time the whole world is digging out opportunities from the rise of the yuan, Australia should not lag behind."

It was significant the liberalising governor of the People's Bank, Zhou Xiaochuan, kept his job during the reshuffle of China's leadership. He said last year at a conference: "The next movement related to the yuan is going to be reform of convertibility. We are moving in this direction; we need to go further, we will have some deregulation."

Most importantly, to China, Australia will serve as the Guniea Pig - should this experiment in FX liberalization work out to China's satisfaction, expect Beijing to engage many more trade partners in direct currency conversion.

Beijing appears to have chosen Canberra as its partner in this next movement for straightforward economic reasons, as Australia has become China's fifth-biggest source of imports and thus, the appropriate partner for the march of its currency.

Ms Gillard and President Xi Jinping may also during the visit establish a "strategic partnership" between the countries. This will enable Australia to catch up in status with a large range of nations.

Why is this so very critical? For the simple reason that the free lunch the US has enjoyed ever since the advent of the US dollar as world reserve currency, may be coming to an end as other, more aggressive alternatives - both fiat, and hard-asset based - to the USD appear. And since there is no such thing as a free lunch, all the deferred pain the US Treasury Department has been able to offset thanks to its global currency monopoly status will come crashing down the second the world starts getting doubts about the true nature of just who the real reserve currency will be in the future.



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China and Brazil sign $30bn currency swap agreement



Beijing has been trying to push the yuan as an alternative global reserve currency

China and Brazil have signed a currency swap deal, designed to safeguard against future global financial crises.

The pact, first announced last year, will allow their central banks to swap local currencies worth up to 190bn yuan or 60bn reais ($30bn; £20bn).

Officials said this will ensure smooth bilateral trade, regardless of global financial conditions.

Along with being the world's second-largest economy, China is also Brazil's biggest trading partner.

"If there were shocks to the global financial market, with credit running short, we'd have credit from our biggest international partner, so there would be no interruption of trade," said Guido Mantega, Brazil's economy minister.

The agreement was signed on the sidelines of the fifth Brics (Brazil, Russia, India, China and South Africa) summit being held in Durban, South Africa.

“The purpose of this swap is that, independent of the conditions prevailing in the international financial market, we will have $30bn available” Alexandre Tombini Governor, Brazil Central Bank

'Guarantee normal trade'

Trade between China and Brazil has grown robustly over the past few years, with volumes rising from $6.7bn in 2003 to nearly $75bn in 2012.

A large chunk of this growth has been driven by growing Chinese demand for Brazil's resources, such as iron ore and soy products.

Meanwhile, Brazil has also become a key export market for goods manufactured in China.

Brazil's Central Bank governor Alexandre Tombini said the swap agreement would ensure that trade volumes between the two nations did not suffer if a financial crisis in the future hurt global liquidity.

"The purpose of this swap is that, independent of the conditions prevailing in the international financial market, we will have $30bn available which would represent eight months of exports from Brazil to China and 10 months of imports to Brazil from China," he said.

"This is sufficiently large to guarantee normal trade operations."

Bigger yuan role China has been pushing for a more international role for its currency, the yuan. It has been trying to promote the yuan as an alternative to the US dollar as a global reserve currency.

As part of that push, it has signed a series of swap deals with some of its key trading partners.

Such agreements not only allow central banks to swap currencies, but can also be used by firms to settle trade in local currencies rather than in US dollars, as happens now, since China's currency is not fully convertible to other currencies.

Earlier this year, the Bank of England said that it was in negotiations with its Chinese counterpart to finalise a three-year swap agreement.

Last year, China signed a swap deal with Australia worth up to A$30bn ($31bn; £20bn) to promote bi-lateral trade and investment.

Read More:
http://www.bbc.co.uk/news/business-21949615

[Ryan Ruck]

Payments Using Chinese Yuan Continue to Surge as Currency Tops Russian Rouble in Popularity

May 1, 2013

A press release from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) shows that the value of payments using Chinese Yuan currency grew by 171 percent between January 2012 and January 2013.

In January 2013 alone, payments in the Chinese currency grew in value by 24 percent from December, pushing the Yuan past the Russian Rouble to the thirteenth slot for world currency payments.

This 24% spike is nearly double the 13% increase recorded across all currencies.

The SWIFT "RMB Tracker" (RMB is short for Renminbi or Yuan) was launched in September 2011 and provides monthly reporting on the progress made by the Yuan towards becoming an international currency.

The latest RMB Tracker report, released on April 25, shows that global Yuan payments gained 32.7 percent in value for the month of March, reaching an all-time high market share of 0.74%.

This increase compares with an average monthly increase of just 5.1% across all currencies.

According to the press release, the Yuan "continues to ascend the ranks as a major international payments currency."

To see the top 20 world payment currencies, click here.

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BRICS close to consensus on $100 billion foreign currency reserve fund

Global Times | 2013-8-28 0:58:01 By Song Shengxia

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Major emerging countries, known as the BRICS group of nations, are close to reaching a consensus on creating a $100 billion foreign currency reserve fund to help ease short-term liquidity pressure and safeguard financial stability, a senior Chinese central bank official said Tuesday.

Meanwhile, senior officials Tuesday urged the US to consider the time and pace at which it withdraws its quantitative easing stimulus program to avoid negative impacts on emerging economies.

Speaking at a news briefing ahead of the G20 leaders' summit in Russia next week, Yi Gang, deputy governor of the People's Bank of China, said leaders of the BRICS group - Brazil, Russia, India, China and South Africa - have agreed on the ratio of contributions, operation mechanisms, governance structure and loan-to-value ratio of a Contingent Reserve Arrangement (CRA).

There will be more consensus on the arrangement by BRICS leaders when they meet on the sidelines of the G20 summit to be held in St. Petersburg, Russia on September 5 and 6, Yi said.

"We will see the launch of the fund in the foreseeable future," Yi said.

"The fund offers a means to prepare for any negative effect from the volatility in the global financial market and is a supplement to the existing international financial systems such as the IMF and the World Bank. The efficiency and capabilities of these organizations are restrained by their complicated decision-making mechanisms," Zhao Xijun, a deputy director of the Finance and Securities Research Institute at the Renmin University of China, told the Global Times Tuesday.

"The new fund will help ensure the financial stability of the major emerging economies and their stability will benefit the global economy and financial markets," Zhao said.

Yi also revealed at the briefing that China will contribute the "biggest share" to the fund, but not exceeding 50 percent of the total contributions, without giving more details.

In March, BRICS leaders signed an agreement to launch the fund with an initial size of $100 billion at the BRICS summit in South Africa.

"China is in a better position to play a big role in the new fund because China has the biggest economy among the BRICS nations and has the biggest share and most diverse structure in international trade," Song Guoliang, a finance professor at the Beijing-based University of International Business and Economics, told the Global Times Tuesday.

Meanwhile, officials warned at Tuesday's news briefing of the sudden change of tone in monetary policy by some developed countries.

Signs that the US would soon wind back its monetary easing policy have affected market expectations in some emerging economies, resulting in dramatic outflows of foreign investment from these countries, said Chinese Vice Foreign Minister Li Baodong at the same briefing.

Markets are worried that the US Federal Reserve might decide to abandon its monetary easing policy when it meets in mid-September following its June announcement that it may start withdrawing the plan.

The US must consider the spill-over effect of its monetary policy, especially the time and pace at which it will scale back its ultra-loose monetary policy, Vice Finance Minister Zhu Guangyao said at the same briefing.

Agencies contributed to this story

[Avvakum]

BRICS close to consensus on $100 billion foreign currency reserve fund

Global Times | 2013-8-28 0:58:01 By Song Shengxia

E-mail Print

Major emerging countries, known as the BRICS group of nations, are close to reaching a consensus on creating a $100 billion foreign currency reserve fund to help ease short-term liquidity pressure and safeguard financial stability, a senior Chinese central bank official said Tuesday.

Meanwhile, senior officials Tuesday urged the US to consider the time and pace at which it withdraws its quantitative easing stimulus program to avoid negative impacts on emerging economies.

Speaking at a news briefing ahead of the G20 leaders' summit in Russia next week, Yi Gang, deputy governor of the People's Bank of China, said leaders of the BRICS group - Brazil, Russia, India, China and South Africa - have agreed on the ratio of contributions, operation mechanisms, governance structure and loan-to-value ratio of a Contingent Reserve Arrangement (CRA).

There will be more consensus on the arrangement by BRICS leaders when they meet on the sidelines of the G20 summit to be held in St. Petersburg, Russia on September 5 and 6, Yi said.

"We will see the launch of the fund in the foreseeable future," Yi said.

"The fund offers a means to prepare for any negative effect from the volatility in the global financial market and is a supplement to the existing international financial systems such as the IMF and the World Bank. The efficiency and capabilities of these organizations are restrained by their complicated decision-making mechanisms," Zhao Xijun, a deputy director of the Finance and Securities Research Institute at the Renmin University of China, told the Global Times Tuesday.

"The new fund will help ensure the financial stability of the major emerging economies and their stability will benefit the global economy and financial markets," Zhao said.

Yi also revealed at the briefing that China will contribute the "biggest share" to the fund, but not exceeding 50 percent of the total contributions, without giving more details.

In March, BRICS leaders signed an agreement to launch the fund with an initial size of $100 billion at the BRICS summit in South Africa.

"China is in a better position to play a big role in the new fund because China has the biggest economy among the BRICS nations and has the biggest share and most diverse structure in international trade," Song Guoliang, a finance professor at the Beijing-based University of International Business and Economics, told the Global Times Tuesday.

Meanwhile, officials warned at Tuesday's news briefing of the sudden change of tone in monetary policy by some developed countries.

Signs that the US would soon wind back its monetary easing policy have affected market expectations in some emerging economies, resulting in dramatic outflows of foreign investment from these countries, said Chinese Vice Foreign Minister Li Baodong at the same briefing.

Markets are worried that the US Federal Reserve might decide to abandon its monetary easing policy when it meets in mid-September following its June announcement that it may start withdrawing the plan.

The US must consider the spill-over effect of its monetary policy, especially the time and pace at which it will scale back its ultra-loose monetary policy, Vice Finance Minister Zhu Guangyao said at the same briefing.

Agencies contributed to this story

Well, here comes the collapse of the American economy, right on schedule. What's Obama and his Trotskyite clique going to do about it? Nothing.

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'China is taking a leap forward to control world currency'

Published time: September 11, 2013 10:32

It is obvious that China is up to something hoarding gold like a dragon. In fact, it is taking a leap forward to control the world currency and to replace it with the yuan, Dr. Thorsten Pattberg, China expert at the Peking University, told RT.

China is vowing to make more reforms, among them cutting red tape and establishing the yuan as a world currency. The 7th Annual Meeting of the New Champions is opening in the Chinese city of Dalian, the gathering has become known as a 'summer Davos'. RT has talked to Dr. Pattberg about China’s prospects for introducing a new world currency.

RT: Do you think when China says it wants to make the yuan a global alternative to the dollar, is there any possibility of that happening at some point?

Thorsten Pattberg: Yes, it's perfectly reasonable to think that the Chinese want to see their currency become the next world currency, there's a plan. And of course China at the moment is purchasing more and more gold, this also plays into this. We heard they recently purchased several hundred tons of gold through Hong Kong, the trading hub. And of course if you hoard gold like a dragon, this is a lot about prestige. The mere presence of gold in your country gives rise to even more self-confidence and to this bling-bling sensation that China is really up to something. The mere intention to buy more gold in the future will certainly have an impact on the rise of gold prices in the world. So China is taking a leap forward to control the world currency and to replace it with yuan.

RT: The current Chinese leadership seems almost obsessed with reforms. Why? Isn't China in good enough shape as it is?

TP: It is still growing by 7.5%, it's enough for the current leadership. And of course China naturally is a reform-based society that announces reforms regularly. The new government is pursuing a range of new reforms, tax reforms basically. They want to transform the investment economy into an economy that is more focused on domestic consumption.

RT: With increasing wealth comes enormous changes in society, in national identity, can China itself keep up with its own economic growth?

TP: I believe that it will keep it up for the next 10 years at least. But there are a lot of things to do. The economy growth is actually faster than a lot of other things in China like the political maturity. Social problems are still looming in China. And one of the topics at the global forum is the work ethic. China wants to have a stakehold and make the rules of the game and shape them in the future, and it has to come to the table and discuss with Europeans and Americans how we deal together in the future. Not only on economic issues, but on political ones, on ecological ones, social and cultural ones. China has to catch up in all those fields quickly.

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Ned Goodman:The dollar is about to be dethroned as the world's de facto currency (Video)

Ned Goodman:The dollar is about to be dethroned as the world's de facto currency (Courtesy of Cambridge House)

Kenneth Schortgen JrFinance Examiner

Related Photo:


Courtesy of kippreport.com

September 18, 2013

On Sept. 15, Canadian billionaire Ned Goodman spoke at the Cambridge House regarding the U.S. dollar, and the state of the Western economies. In his nearly eight minute speech, the 75 year old CEO of Dundee Capital Markets and Chancellor of Brock University painted a picture of the upcoming change in reserve currency control by the U.S., and how the dollar will soon be replaced as nations around the world rush to get rid of their currency reserves.

Ned Goodman: In my view, the dollar is about to become dethroned as the world's de facto currency. I'll tell you how I came to that conclusion so quickly... the new President of China, Xi Jinping, his first visit on the day of his becoming President, was at his request to meet with Mr. Putin. And he immediately made a deal with Mr. Putin to get all the oil that he needs, which he can buy in Renminbi.

We're headed to a period of stagflation, maybe serious inflation, but stagflation for sure, and the United States will be losing the privilege to print at its will, the world's reserve currency. A period that's going to be very inflationary, and I can tell you that before that happens, it is likely that it is going to get quite ugly. - Ned Goodman, Cambridge House

Goodman's assessment falls in line with a story we broke on Examiner over a year ago, where details of the oil agreement between Russia and China were provided to a source by officers within the oil industry. Besides being able to purchase oil using a currency other than the U.S. dollar, China began to wholesale Russian oil to countries around the world, including Iran who even today remains under UN sanctions.

In the wake of the banking crisis of 2008, the world has quickly begun moving away from U.S. dollars, and into trade agreements which bypass the reserve currency and SWIFT systems. In 2008, Chinese Yuan made up 0% of all international transactions, but in the five years since, the Asian currency is now involved in 12% of all global trade.

The death of the dollar, and its removal as the world's reserve currency, is no longer a conspiracy, or dreamed outcome by most of the financial world, and instead is an expected reality for the near future. When that day comes is a guess most analysts cannot predict, but in light of how Russia and other nations rejected the U.S. in their desire to chastise Syria last week, the fear of dollar hegemony no longer carries any real weight to it. And like the Suez Canal event in the 1950's, which saw the end of Britain as a global superpower, so too may the events of Syria spell the end of America's domination over the global economy.

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World should 'de-Americanise', says China following default fears
US default fears prompts China's state-run media call for the world to "de-Americanise" as Christine Lagarde warns of "massive disruption the world over"


It is the third time since Barack Obama took power that budget negotiations have gone to the wire in this way Photo: AP By Philip Sherwell, New York, Malcolm Moore in Beijing

8:04PM BST 13 Oct 2013
Comments

The looming prospect of a US default on debt prompted China to call for the world to “de-Americanise”, amid warnings of a new global recession.

In China, Xinhua, the official government news agency, said that as American politicians continued to flounder over a deal to break the impasse, “it is perhaps a good time for the befuddled world to start considering building a de-Americanised world”.

The jibe came as Christine Lagarde, the International Monetary Fund chief, raised the spectre of a repeat of the 2008 financial crash as hopes dwindled for a resolution of the crisis over the debt ceiling and partial government shutdown.

Harry Reid, the leader of the Democrat-controlled Senate and Mitch McConnell, who heads the Republican minority, met on Sunday for “preliminary” talks following the acrimonious collapse of negotiations between the White House and Republicans in the lower chamber.

Jack Lew, the Treasury secretary, has said that the US will run out of money to pay its bills on Thursday if Congress does not authorise an increase in federal borrowing limits.

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Ms Lagarde repeated her warning about the impact of failing to raise the debt ceiling following the fund’s annual meeting of finance ministers in Washington.

“If there is that degree of disruption, that lack of certainty, that lack of trust in the US signature, it would mean massive disruption the world over,” she told NBC’s Meet the Press programme. “And we would be at risk of tipping, yet again, into recession.”

Xinhua attacked America’s pre-eminent position in the world, adding that “such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated”.

State-run newspapers nonetheless have also noted the inseparable economic ties which bind China and the US together. China is the biggest foreign holder of US Treasury bonds, worth a total of $1.28 trillion according to American government data.

“The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations’ tremendous dollar assets in jeopardy and the international community highly agonised,” said the commentary.

Back in Washington, Mr Reid did not strike a particularly optimistic tone as he described the first meeting with Mr McConnell. “I hope that our talking is some solace to the American people and the world,” was the best he could offer after leaving the discussions.

Republican congressmen from the House of Representatives earlier left the capital for today’s Columbus Day holiday after President Barack Obama rejected their proposal for a stop-gap six-week extension of the federal debt ceiling.

The Republican-controlled House, which would have to approve any deal, is not scheduled to meet until Monday afternoon as the partial government shutdown enters its third week

In a rare piece of good news, several national landmarks, including the Statue of Liberty and Grand Canyon, re-opened to the public after individuals states agreed to pay for the running of the federal parks during the government shutdown.

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Europe, China agree currency deal

By Alanna Petroff @AlannaPetroff October 10, 2013: 9:41 AM ET



The new currency swap agreement between the European Central Bank and the People's Bank of China has been in the works for the past few months.

LONDON (CNNMoney)
Europe and China have agreed a currency swap deal to boost trade and investment between the regions.

Under the terms of the deal between the European Central Bank and the People's Bank of China, the swap facility could total as much as 350 billion yuan and €45 billion.

The agreement is one of the largest currency deals between China and a non-Asian trading partner and will last for three years.

Europe and China trade roughly €480 billion in goods and services each year, and the European Union is China's biggest export market.

Related: Yuan now among most traded currencies

China is pushing to internationalize the yuan, and the currency is being used to conduct a growing number of transactions on international markets.

For years Beijing has kept tight control of the yuan, pegging the currency to the U.S. dollar as a way of promoting manufacturing in its export-driven economy, though it has slowly been loosening its hold recently.

The swap deal will allow more trade and investment between the regions to be conducted in euros and yuan, without having to convert into another currency such as the U.S. dollar first, said Kathleen Brooks, a research director at FOREX.com.

"It's a way of promoting European and Chinese trade, but not doing it with the U.S. dollar," said Brooks.

"It's a bit like cutting out the middleman, all of a sudden there's potentially no U.S. dollar risk."

Related: U.S. debt loses some appeal in Hong Kong

In June, China struck a similar agreement with the Bank of England worth up to 200 billion yuan.

The deal with the ECB comes as political gridlock in the U.S. weakens the U.S. dollar against many other global currencies.

A spokesperson for the ECB said the deal had been in the works for the last few months.

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Companion Thread: Is China developing a beachhead inside the borders of America?


China's Largest Conglomerate Buys Building Housing JPMorgan's Gold Vault

Submitted by Tyler Durden on 10/18/2013 13:54 -0400

In what is the most remarkable news of the day, which has so far passed very quietly under the radar, Fosun International, China's largest private-owned conglomerate which invests in commodities, properties and pharmaceuticals also known as "Shanghai's Hutchison Whampoa", announced in a statement filed just as quietly with the Hong Kong stock exchange, that it had purchased JPM's iconic former headquarters, the tower built by none other than David Rockefeller, at 1 Chase Manhattan Plaza for a measly $725 million.

Here is Bloomberg described the transaction:

Over the past year, other Chinese developers and wealthy investors have been buying real estate in the U.S.

China Vanke Co., the biggest homebuilder listed in mainland China, said in February it joined a residential real estate venture in San Francisco. The families of Zhang Xin, co-founder of Soho China Ltd. (410), the biggest developer in Beijing’s central business district, and Brazilian banking billionaire Moise Safra this year bought a 40 percent stake in New York’s General Motors Building.

The landmark 1 Chase Manhattan Plaza, designed by architect Gordon Bunshaft and built in the 1950s, was once the headquarters of Chase Manhattan Bank. Rockefeller, as head of the bank’s building committee, selected the site and oversaw its construction.

JPMorgan intends to relocate about 4,000 employees, most of the people who work in the 60-story skyscraper, to other New York locations, Brian Marchiony, a spokesman, said in August. JPMorgan occupies about half of its space.

None of this is particularly newsworthy What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm's commercial gold vault: incidentally, the largest in the world.
Recall:

What do we know about 1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure, built in the 1950s, was the headquarters of the once-legendary Chase Manhattan corporation, and which when it was built was the world's sixth tallest building, not much.
So we set off to learn more.



o learn more, we first went to the motherlode: the Landmarks Preservation Commission, whose report on 1 CMP describes everyone one wants to know about this building and then much more, such as that:

One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a 6-story base, of which 5 floors are beneath grade.

So the old Chase HQ, once the stomping grounds of one David Rockefeller, and soon to be the other half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed...

Reading on:

Excavations, said to be the largest in New York City history, reached a depth of 90 feet

Or, about the same depth as the bottom-most sub-basement under the NY Fed...

But then we hit the jackpot:

Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault.

And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the "world's largest bank vault."

Digging some more into the curious nature of this biggest bank vault in the world, we learn the following, courtesy of a freely available book written by one of the architects:

On the lowest level was the vault, which rested directly on the rock - the "largest bank vault in the world, longer than a football field." It was anchored to the bedrock with steel rods. This was to prevent the watertight, concrete structure from floating to the surface like a huge bubble in the event that an atomic bomb falling in the bay would blow away the building and flood the area.

In other words, the world's biggest bank vault, that belonging to the private Chase Manhattan empire, and then, to JPMorgan, was so safe, the creators even had a plan of action should it sustain a near-direct hit from a nuclear bomb, and suffer epic flooding (such as that from Hurricane Sandy).
* * *

So, what the real news of today is not that JPM is selling its gold vault, we knew that two months ago, or that it is outright looking to exit the physical commodities business, that too was preannounced. What is extremely notable is that in one very quiet transaction, China just acquired the building that houses the world's largest gold vault.

Why? We don't know. We do know that China's gross gold imports from Hong Kong alone have amounted to over 2000 tons in the past two years. This excludes imports from other sources, and certainly internal gold mining and production.



One guess: China has decided it has its fill of domestically held gold and is starting to acquire gold warehouses in the banking capitals of the world.
For now the reason why is unclear but we are confident the answer will present itself shortly.




China’s takeover of America continues as they purchase JP Morgan HQ and gold vault

It is appearing more than more that the transfer of economic power from the United States to China is coming swifter than anyone suspected. In a stunning move on Oct. 18, a Chinese conglomerate purchased the Headquarters of Chase Manhattan bank (JP Morgan Chase), and its underground structures that include the world’s largest bank vault.

China’s largest private-owned conglomerate which invests in commodities, properties and pharmaceuticals also known as “Shanghai’s Hutchison Whampoa”, announced in a statement filed just as quietly with the Hong Kong stock exchange, that it had purchased JPM’s iconic former headquarters, the tower built by none other than David Rockefeller, at 1 Chase Manhattan Plaza for a measly $725 million.

None of this is particularly newsworthy What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm’s commercial gold vault: incidentally, the largest in the world. – Zerohedge

Since China is the current leading accumulator of physical gold in the world, it is interesting to note that they will soon have access to a vault on Wall Street where they can quickly move gold they purchase through contract from the COMEX directly over to their new location without having to ship it directly to their vaults in Hong Kong. In fact, it also allows them to have a depository in the U.S. where they can function as a new metals exchange that is a subsidiary of the one they opened in China just a few years ago.

It is also very interesting to realize that this purchase was recorded one day after ECB Chairman Mario Draghi stated that he is in favor of central bank gold accumulation to help balance an increasingly unstable dollar (reserve currency). Draghi’s remarks come a little more than a week after the ECB opened new currency swap lines with China to allow trading of the Yuan in the Euro Zone.

As former banking powers like JP Morgan Chase begin to recede on the global stage, they are quickly being replaced by the new financial powers of China and their partnership of BRICs nations. And as the U.S. feverishly tries to keep and hold its position as the sole financial superpower, and the dominant nation to print the world’s currency, China is methodically consolidating a foundation in bits and pieces, including many of America’s former monuments (Panama Canal, Chase Manhattan HQ), to prepare for the smooth transfer from one dying economic power to the next.

Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, and hosts the popular web blog, The Daily Economist. Ken can also be heard Friday evenings giving an weekly economic report on the Angel Clark radio show.

[vector7]

China makes a move against the US dollar

Beijing has made it clear that the dollar’s status as the global reserve currency and global base currency must be revoked. The recent debt ceiling debacle in the US gave the Chinese quest for yuan internationalization new supporters and momentum.

China has entered into a swap agreement with the European Central Bank. This agreement is described by market observers as “huge” or “humongous”. It is the largest currency swap agreement ever done by China and will allow the European Union and China to reduce the amount of dollars required for bilateral trade. Eric Brooks, research director at Forex.com, told CNN that “it's a way of promoting European and Chinese trade, but not doing it with the US dollar. It's a bit like cutting out the middleman, all of a sudden there's potentially no US dollar risk." The deal between the ECB and People’s Bank of China established a swap facility that could total as much as 350 billion yuan and €45 billion.

The Chinese state news agency Xinhua published a scathing editorial dedicated to the US fiscal problems and debt ceiling crisis in which it laid out the roadmap for a “de-Americanized” world. This editorial is widely seen as an ultimatum. China demands a new global monetary system in which the dollar won’t be the base currency. Beijing also demands a greater role for the BRICS countries in the decision making processes in the International Monetary Fund and the World Bank. After a temporary solution for the US debt ceiling crisis was found, Xinhua published a second editorial lambasting Washington for its inability to resolve its financial issues in a decisive manner:

“Politicians in Washington have done nothing substantial but postpone once again the final bankruptcy of global confidence in the US financial system… prolonging the fuse of the US debt bomb one inch longer”.

It is safe to assume that we’re witnessing a slow collapse of the dollar-based global monetary system. When China, Russia, the EU and the UK are actively working to bypass the dollar for trade and investment, it is only a matter of time until the current system collapses on itself. A new debt ceiling confrontation in Congress is scheduled for early spring 2014 and is likely to accelerate the collapse.

[Avvakum]

More talk of the threat. Are enough people waking up to this danger? New Article;

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How China Can Cause The Death Of The Dollar And The Entire U.S. Financial System


November 7th, 2013
Share70 Tweet9 0 Share2

By Michael Snyder

The death of the dollar is coming, and it will probably be China that pulls the trigger. What you are about to read is understood by only a very small fraction of all Americans. Right now, the U.S. dollar is the de facto reserve currency of the planet. Most global trade is conducted in U.S. dollars, and almost all oil is sold for U.S. dollars. More than 60 percent of all global foreign exchange reserves are held in U.S. dollars, and far more U.S. dollars are actually used outside of the United States than inside of it. As will be described below, this has given the United States some tremendous economic advantages, and most Americans have no idea how much their current standard of living depends on the dollar remaining the reserve currency of the world. Unfortunately, thanks to reckless money printing by the Federal Reserve and the reckless accumulation of debt by the federal government, the status of the dollar as the reserve currency of the world is now in great jeopardy.
As I mentioned above, nations all over the globe use U.S. dollars to trade with one another. This has created tremendous demand for U.S. dollars and has kept the value of the dollar up. It also means that Americans can export things that they need much more inexpensively than they otherwise would be able to.
The largest exporting nations such as Saudi Arabia (oil) and China (cheap plastic trinkets at Wal-Mart) end up with massive piles of U.S. dollars…

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Instead of just sitting on all of that cash, these exporting nations often reinvest much of that cash into low risk securities that can be rapidly turned back into dollars if necessary. For a very long time, U.S. Treasury bonds have been considered to be the perfect way to do this. This has created tremendous demand for U.S. government debt and has helped keep interest rates super low. So every year, massive amounts of money that gets sent out of the country ends up being loaned back to the U.S. Treasury at super low interest rates…

And it has been a very good thing for the U.S. economy that the federal government has been able to borrow money so cheaply, because the interest rate on 10 year U.S. Treasuries affects thousands upon thousands of other interest rates throughout our financial system. For example, as the rate on 10 year U.S. Treasuries has risen in recent months, so have the rates on U.S. home mortgages.
Our entire way of life in the United States depends upon this game continuing. We must have the rest of the world use our currency and loan it back to us at ultra low interest rates. At this point we have painted ourselves into a corner by accumulating so much debt. We simply cannot afford to have rates rise significantly.
For example, if the average rate of interest on U.S. government debt rose to just 6 percent (and it has been much higher than that at various times in the past), we would be paying more than a trillion dollars a year just in interest on the national debt.
But it wouldn’t be just the federal government that would suffer. Just consider what higher rates would do to the real estate market.
About a year ago, the rate on 30 year mortgages was sitting at 3.31 percent. The monthly payment on a 30 year, $300,000 mortgage at that rate is $1315.52.
If the 30 year rate rises to 8 percent, the monthly payment on a 30 year, $300,000 mortgage would be $2201.29.
Does 8 percent sound crazy to you?
It shouldn’t. 8 percent was considered to be normal back in the year 2000.
Are you starting to get the picture?
We need other countries to use our dollars and buy our debt so that we can have super low interest rates and so that we can afford to buy lots of cheap stuff from them.
Unfortunately, the truly bizarre behavior of the Federal Reserve and the U.S. government over the past several years is causing the rest of the world to lose faith in our currency. In particular, China is leading the call for a “de-Americanized” world. The following is from a recent article posted on the website of France 24…

For decades the US has benefited to the tune of trillions of dollars-worth of free credit from the greenback’s role as the default global reserve unit.
But as the global economy trembled before the prospect of a US default last month, only averted when Washington reached a deal to raise its debt ceiling, China’s official Xinhua news agency called for a “de-Americanised” world.
It also urged the creation of a “new international reserve currency… to replace the dominant US dollar”.

So why should the rest of the planet listen to China?
Well, China now accounts for more global trade than anyone else does, including the United States.
China is also now the number one importer of oil in the world.
At this point, China is even importing more oil from Saudi Arabia than the United States is.
China now has an enormous amount of economic power globally, and the Chinese want the rest of the planet to start using less U.S. dollars and to start using more of their own currency. The following is from a recent article in the Vancouver Sun…

Three years after China allowed the yuan to start trading in Hong Kong’s offshore market, banks and investors around the world are positioning themselves to get involved in what Nomura Holdings Inc. calls the biggest revolution in the $5.3 trillion currency market since the creation of the euro in 1999.

And over the past few years we have seen the global use of the yuan rise dramatically…

International use of the yuan is increasing as the world’s second-largest economy opens up its capital markets. In the first nine months of this year, about 17 percent of China’s global trade was settled in the currency, compared with less than one percent in 2009, according to Deutsche Bank AG.

Of course the U.S. dollar is still king for now, but thanks to a whole host of recent international currency agreements this status is slipping. For example, China just recently signed a major currency agreement with the European Central Bank…

The swap deal will allow more trade and investment between the regions to be conducted in euros and yuan, without having to convert into another currency such as the U.S. dollar first, said Kathleen Brooks, a research director at FOREX.com.
“It’s a way of promoting European and Chinese trade, but not doing it with the U.S. dollar,” said Brooks. “It’s a bit like cutting out the middleman, all of a sudden there’s potentially no U.S. dollar risk.”

And as I have written about previously, we have seen a bunch of other similar agreements being signed all over the planet in recent years…
1. China and Germany (See Here)
2. China and Russia (See Here)
3. China and Brazil (See Here)
4. China and Australia (See Here)
5. China and Japan (See Here)
6. India and Japan (See Here)
7. Iran and Russia (See Here)
8. China and Chile (See Here)
9. China and the United Arab Emirates (See Here)
10. China, Brazil, Russia, India and South Africa (See Here)
But do you hear about any of this on the mainstream news?
Of course not.
They would rather focus on the latest celebrity scandal.
Right now, the global move away from the U.S. dollar is slow but steady.
At some point, some trigger event will likely cause it to become a stampede.
When that happens, demand for U.S. dollars and U.S. debt will disintegrate and interest rates will absolutely skyrocket.
And if interest rates skyrocket that will throw the entire U.S. financial system into chaos. At the moment, there are about 441 trillion dollars worth of interest rate derivatives sitting out there. It is a financial time bomb unlike anything the world has ever seen before.
There are four “too big to fail” banks in the United States that each have more than 40 trillion dollars worth of total exposure to derivatives. The largest chunk of those derivatives is made up of interest rate derivatives. In case you were wondering , those four banks are JPMorgan Chase, Citibank, Bank of America and Goldman Sachs.
A huge upward surge in interest rates would absolutely devastate those banks and cause a financial crisis that would make 2008 look like a Sunday picnic.
Right now, the leader in global trade seems content to use U.S. dollars for most of their international transactions. China also seems content to hold more than a trillion dollars of U.S. government debt.
If that suddenly changes someday, the consequences for the U.S. economy will be absolutely catastrophic and every single American will feel the pain.
The standard of living that all of us are enjoying today depends largely upon China. They can bring down the hammer at any moment and they know it.



Read more at http://investmentwatchblog.com/how-c...dFYHQjyllRT.99

	InvestmentWatch We're always following the world's economic trends and searching for the market-moving insight that everyone else has missed	By EmailPosts

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« ObamaCare: Pay More-Get Less, Real Fed Exposure $29 Trillion, Texas Size Debris Field & Iran Nukes
The Obamacare Trainwreck Is Headed Into A Death Spiral »

How China Can Cause The Death Of The Dollar And The Entire U.S. Financial System


November 7th, 2013
Share70 Tweet9 0 Share2

By Michael Snyder

The death of the dollar is coming, and it will probably be China that pulls the trigger. What you are about to read is understood by only a very small fraction of all Americans. Right now, the U.S. dollar is the de facto reserve currency of the planet. Most global trade is conducted in U.S. dollars, and almost all oil is sold for U.S. dollars. More than 60 percent of all global foreign exchange reserves are held in U.S. dollars, and far more U.S. dollars are actually used outside of the United States than inside of it. As will be described below, this has given the United States some tremendous economic advantages, and most Americans have no idea how much their current standard of living depends on the dollar remaining the reserve currency of the world. Unfortunately, thanks to reckless money printing by the Federal Reserve and the reckless accumulation of debt by the federal government, the status of the dollar as the reserve currency of the world is now in great jeopardy.
As I mentioned above, nations all over the globe use U.S. dollars to trade with one another. This has created tremendous demand for U.S. dollars and has kept the value of the dollar up. It also means that Americans can export things that they need much more inexpensively than they otherwise would be able to.
The largest exporting nations such as Saudi Arabia (oil) and China (cheap plastic trinkets at Wal-Mart) end up with massive piles of U.S. dollars…

Participate in Small Business Saturday




Instead of just sitting on all of that cash, these exporting nations often reinvest much of that cash into low risk securities that can be rapidly turned back into dollars if necessary. For a very long time, U.S. Treasury bonds have been considered to be the perfect way to do this. This has created tremendous demand for U.S. government debt and has helped keep interest rates super low. So every year, massive amounts of money that gets sent out of the country ends up being loaned back to the U.S. Treasury at super low interest rates…

And it has been a very good thing for the U.S. economy that the federal government has been able to borrow money so cheaply, because the interest rate on 10 year U.S. Treasuries affects thousands upon thousands of other interest rates throughout our financial system. For example, as the rate on 10 year U.S. Treasuries has risen in recent months, so have the rates on U.S. home mortgages.
Our entire way of life in the United States depends upon this game continuing. We must have the rest of the world use our currency and loan it back to us at ultra low interest rates. At this point we have painted ourselves into a corner by accumulating so much debt. We simply cannot afford to have rates rise significantly.
For example, if the average rate of interest on U.S. government debt rose to just 6 percent (and it has been much higher than that at various times in the past), we would be paying more than a trillion dollars a year just in interest on the national debt.
But it wouldn’t be just the federal government that would suffer. Just consider what higher rates would do to the real estate market.
About a year ago, the rate on 30 year mortgages was sitting at 3.31 percent. The monthly payment on a 30 year, $300,000 mortgage at that rate is $1315.52.
If the 30 year rate rises to 8 percent, the monthly payment on a 30 year, $300,000 mortgage would be $2201.29.
Does 8 percent sound crazy to you?
It shouldn’t. 8 percent was considered to be normal back in the year 2000.
Are you starting to get the picture?
We need other countries to use our dollars and buy our debt so that we can have super low interest rates and so that we can afford to buy lots of cheap stuff from them.
Unfortunately, the truly bizarre behavior of the Federal Reserve and the U.S. government over the past several years is causing the rest of the world to lose faith in our currency. In particular, China is leading the call for a “de-Americanized” world. The following is from a recent article posted on the website of France 24…

For decades the US has benefited to the tune of trillions of dollars-worth of free credit from the greenback’s role as the default global reserve unit.
But as the global economy trembled before the prospect of a US default last month, only averted when Washington reached a deal to raise its debt ceiling, China’s official Xinhua news agency called for a “de-Americanised” world.
It also urged the creation of a “new international reserve currency… to replace the dominant US dollar”.

So why should the rest of the planet listen to China?
Well, China now accounts for more global trade than anyone else does, including the United States.
China is also now the number one importer of oil in the world.
At this point, China is even importing more oil from Saudi Arabia than the United States is.
China now has an enormous amount of economic power globally, and the Chinese want the rest of the planet to start using less U.S. dollars and to start using more of their own currency. The following is from a recent article in the Vancouver Sun…

Three years after China allowed the yuan to start trading in Hong Kong’s offshore market, banks and investors around the world are positioning themselves to get involved in what Nomura Holdings Inc. calls the biggest revolution in the $5.3 trillion currency market since the creation of the euro in 1999.

And over the past few years we have seen the global use of the yuan rise dramatically…

International use of the yuan is increasing as the world’s second-largest economy opens up its capital markets. In the first nine months of this year, about 17 percent of China’s global trade was settled in the currency, compared with less than one percent in 2009, according to Deutsche Bank AG.

Of course the U.S. dollar is still king for now, but thanks to a whole host of recent international currency agreements this status is slipping. For example, China just recently signed a major currency agreement with the European Central Bank…

The swap deal will allow more trade and investment between the regions to be conducted in euros and yuan, without having to convert into another currency such as the U.S. dollar first, said Kathleen Brooks, a research director at FOREX.com.
“It’s a way of promoting European and Chinese trade, but not doing it with the U.S. dollar,” said Brooks. “It’s a bit like cutting out the middleman, all of a sudden there’s potentially no U.S. dollar risk.”

And as I have written about previously, we have seen a bunch of other similar agreements being signed all over the planet in recent years…
1. China and Germany (See Here)
2. China and Russia (See Here)
3. China and Brazil (See Here)
4. China and Australia (See Here)
5. China and Japan (See Here)
6. India and Japan (See Here)
7. Iran and Russia (See Here)
8. China and Chile (See Here)
9. China and the United Arab Emirates (See Here)
10. China, Brazil, Russia, India and South Africa (See Here)
But do you hear about any of this on the mainstream news?
Of course not.
They would rather focus on the latest celebrity scandal.
Right now, the global move away from the U.S. dollar is slow but steady.
At some point, some trigger event will likely cause it to become a stampede.
When that happens, demand for U.S. dollars and U.S. debt will disintegrate and interest rates will absolutely skyrocket.
And if interest rates skyrocket that will throw the entire U.S. financial system into chaos. At the moment, there are about 441 trillion dollars worth of interest rate derivatives sitting out there. It is a financial time bomb unlike anything the world has ever seen before.
There are four “too big to fail” banks in the United States that each have more than 40 trillion dollars worth of total exposure to derivatives. The largest chunk of those derivatives is made up of interest rate derivatives. In case you were wondering , those four banks are JPMorgan Chase, Citibank, Bank of America and Goldman Sachs.
A huge upward surge in interest rates would absolutely devastate those banks and cause a financial crisis that would make 2008 look like a Sunday picnic.
Right now, the leader in global trade seems content to use U.S. dollars for most of their international transactions. China also seems content to hold more than a trillion dollars of U.S. government debt.
If that suddenly changes someday, the consequences for the U.S. economy will be absolutely catastrophic and every single American will feel the pain.
The standard of living that all of us are enjoying today depends largely upon China. They can bring down the hammer at any moment and they know it.



Read more at http://investmentwatchblog.com/how-c...dFYHQjyllRT.99