Dnari131: the Globe seems to be crackin at the seams...something must be comin around the corner!
BACKDOC: YES SIR! THINGS ARE A POPPIN IN A BUNCH OF WAYS!
MY ADVICE IS TO KEEP YOUR EYES ON THE DOLLAR!
ONCE VIETNAM AND IRAQ HAVE A RATE THEY WILL DE-DOLLARIZE AS QUICK AS THEY CAN WHILE THE DOLLAR IS STILL PROPPED UP!
ONCE THATS DONE, LOOK OUT BELOW!
BACKDOC: WELL THUNDER, THERE YOU SEE IT IN INK!
SAUDI ARABIA WANTS TO BREAK AWAY! NOW MY SDR THEORY MAY BE GETTING SOME TEETH!
SINCE CHINA IS STARTING TO DEFAULT ON ITS DIM BOND DEBT A SOLUTION WILL NEED TO ARISE TO STABILIZE THE YUAN WON'T IT?
RIGHT! OZ CAN NOT LET THE YUAN TOTALLY BE RUINED BECAUSE OF ITS ROLE IN THE SDR NOW!
SINCE CHINA IS S.A.'S BIGGEST CUSTOMER IT SEEMS LOGICAL THAT S.A. WILL DE-PEG AND SETTLE IN YUAN.
IN ADDITION JUST LIKE IRAN A SECONDARY CURRENCY WILL LIKELY BE USED FOR EMPIRE COUNTRIES OUTSIDE THE SILK ROAD.
I BELIEVE THAT WILL BE THE POUND SINCE IT CONTINUES TO GET POUNDED AND IS FACING A BREXIT VOTE ON THE 23RD OF JUNE! HEE HEE DOC IMO
Thunderhawk: The Empire of the Petrodollar and the Price of Refusing It
Ahead of the meeting of OPEC and non-OPEC oil producers scheduled for April 17 in Qatar in a bid to stabilize plummeting crude prices, let’s have a look at oil's financial heart, the petrodollar system, and the unfortunate position of those member states who tried to break free of it.
OPEC members and key oil producers from outside the cartel are set to meet in Qatar’s capital Doha on April 17 in a bid to stabilize plummeting crude prices.
The meeting is a "follow-up" to the talks between Qatar, Russia, Saudi Arabia and Venezuela held earlier in February, where they proposed an accord to freeze oil output at January levels, the first significant agreement between OPEC and non-OPEC producers in 15 years.
The Qatari oil minister and current OPEC President, Mohammed Al Sada said in a statement that 15 countries accounting for some 73 percent of global oil output supported further action.
Meanwhile, let’s have a look at the system which underlies the standardization of oil prices and the fate of those countries who once wished to abandon it.
The Empire of the Petrodollar
Soon after the collapse of the Bretton Woods gold standard in the early 1970s, when the US unilaterally abandoned the Gold Standard which pegged the value of the dollar to the price of gold, and all other currencies were pegged to the dollar, the US struck a deal with Saudi Arabia to standardize oil prices in dollar terms.
Though no formal proof exists for the oft-repeated assertion, Turkish conservative daily newspaper Yeni Safak recalls that it was Richard Nixon's Secretary of State, Henry Kissinger, who made a secret visit to Saudi Arabia as early as 1972, to fix and set what became later called the "petrodollar system and petrodollar recycling."
Kissinger may have sealed a deal whereby Saudi Arabia would formally and solely accept dollars for all its oil sales, and would exert its power over the Arab region to ensure other Gulf exporters did the same.
Saudi Arabia would then make available and place "surplus liquidities," unspent dollars, in the US Federal Reserve system, starting with the Federal Reserve Bank of New York.
The petrodollar recycling system thereby elevated the US dollar to the world's reserve currency and brought massive advantages to the US.
Worldwide, any buyer and importer of Arab oil would first need to buy and hold dollars, ensuring strong global demand for the US currency.
Secondly, the surplus or unspent dollars that each state would accumulate in its national treasury would needed to be "recycled.
These surplus dollars are spent on domestic consumption, lent abroad to meet the balance of payments of developing nations, or invested in US dollar denominated assets.
This last point, is the most beneficial for the US dollar; as the petrodollars make their way back to the US, these recycled dollars are used to purchase US securities (such as Treasury bills), which creates liquidity in the financial markets, keeps interest rates low and promotes non-inflationary growth.
These "petrodollars" going straight into the Federal Reserve system, backstop the US dollar, and enable the strategy of "controlled devaluation," needed to help service growing US debt by devaluing the money used to repay loans, to operate without running out of control and turning into an inflation rout.
The Sad Fate of the Refuseniks
Yeni Safak recalls the unfortunate position of those member states who once attempted to get out of the system.
Back in November 2000, Baghdad insisted on and received UN approval to sell oil through the oil-for-food program for euros. Iraq had threatened to suspend all oil exports — about 5 percent of the world's total — if the body turned down the request.
According to The Guardian’s report on the issue, “Saddam's Weapons of Mass Destruction was not really the issue — and neither was Saddam himself.
“The real issue is candidly described in a 2001 report on "energy security" — commissioned by then US Vice-President Dick Cheney — published by the Council on Foreign Relations and the James Baker Institute for Public Policy. It warned of an impending global energy crisis that would increase "US and global vulnerability to disruption," and leave the US facing "unprecedented energy price volatility."
In 2001, Venezuela’s ambassador to Russia spoke of Venezuela switching to the Euro for all their oil sales. Within a year there was a coup attempt against Chavez, reportedly with assistance from the CIA.
Back in 2009 then president of Libya Muammar Gaddafi was named the head of the 53-member body of the African Union.
According to more than one observer, Gaddafi put forward a plan to quit selling Libyan oil in US dollars, demanding payment instead in gold-backed “dinars” (a single African currency made from gold).
The regime, sitting on massive amounts of gold, estimated at close to 150 tons, was also pushing other African and Middle Eastern governments to follow suit.
Right afterwards Gaddafi changed from “a model” and “important ally” to becoming the next target for regime change.
Numerous reports suggest that in 2005-2006, the Tehran government developed a plan to begin competing with New York's NYMEX and London's IPE with respect to international oil trades — using a euro-denominated international oil-trading mechanism.
The clear aim was to establish a firm foothold of the euro in the international oil trade.
Now, as many more countries, including Russia, China, Saudi Arabia and others are talking of breaking free from the petrodollar system, their joint meetings become more and more intriguing.
BACKDOC: WE HAVE BEEN WATCHING THIS AGGRESSIVE TAX GRAB BY THE UK FOR SOME TIME NOW. IT SEEMS TO BE GEARING UP FOR A COUNTRY BY COUNTRY APPROACH! MMMMM WHY?
WELL, AFTER THE MIGRANT CRISIS HAS DONE EXACTLY WHAT IT WAS INTENDED TO DO, BREAK UP THE SCHENZENG AGREEMENT, ITS TIME NOW TO START SENDING THEM HOME AS WE SEE SOME GETTING READY TO BE SENT BACK TO TURKEY!
THE DAMAGE SEEMS TO BE IRRECOVERABLE FOR THE EU. COUNTRIES WILL REDISCOVER THEIR OLD CURRENCIES AGAIN AND BEGIN TO MOVE TOWARD THEIR ASSET BACKED NEW REALITY!
IF THE UK BREXITS THERE WILL BE A DOMINO AFFECT AND SPAIN WITH ITS "BREAKING UP IS HARD TO DO", WILL BE RIGHT BEHIND! HEE HEE
ITALY IS ALSO FINANCIALLY CHALLENGED. WHO WILL BAIL OUT THE EURO? WILL THE DOLLAR AND THE EURO BE REPLACED? MMMM WE WATCH WE STUDY! DOC IMO
Thunderhawk: DOUBLE PLAY!!!
EU Tax Code Derided as a 'Parody of Transparency'
A proposed plan to allow for country-by-country reporting of major companies' profits - in an effort to counter aggressive tax avoidance by big multinationals such as Google, Amazon and Starbucks - has been branded a "parody of transparency" by critics.
EU finance ministers in March agreed to make the largest corporations operating in the EU report their activities to tax administrations. It follows a serious of rulings and investigations by the European Parliament and Commission.
However, critics say the new tax arrangement — for multinationals with a total consolidated group revenue of at least US$847 million — will only involve passing tax information between member states' tax agencies and will not be made public or available to journalists.
Campaign group Transparency International says the country-by-country reporting (CBCR) scheme is further flawed in that companies will only be required to publish information on a CBCR basis for activities in EU Member States.
"For the rest of the world, including tax havens outside the EU, companies will only have to disclose an aggregate figure which undermines the legislation. Multinationals will still be able to shift their profits outside the EU without anyone being able to monitor where they are located, what they are doing and what they give to governments in the form of taxes or other payments. If a CBCR system only applies to 28 countries and leaves out 168, it cannot be called CBCR," the campaign group said.
The group also says the CBCR scheme does not go into enough detail. "What's missing from this proposal are assets, sales and purchases, public subsidies received, and a list of subsidiaries. We have strongly advocated for the inclusion of both public subsidies and payments to governments in the legislation, as these are important elements to raise flags on potential corruption cases and collusion between governments and corporations.
"Despite strong rhetoric, the EU has made little in the way of progress on real corporate tax transparency. The European Commission's long-awaited leaked draft proposal fails to deliver and is a parody of transparency," it said.
In January 2016, the European Commission branded the Belgian "excess profit" tax scheme illegal under EU state aid rules and ordered the country to recover the US$760 million unpaid tax from the companies concerned, most of which are major multinationals.
In October 2015, the Commission ruled that Luxembourg and the Netherlands have granted selective tax advantages to Fiat and Starbucks, respectively. The Commission also has three ongoing in-depth investigations into concerns that tax rulings may give rise to state aid issues, concerning Apple in Ireland, Amazon in Luxembourg and McDonald's in Luxembourg.
The investigation into Ireland's tax treatment of Apple is ongoing. Last December the Commission opened an investigation into Luxembourg's tax deal with McDonald's.
Brexit Rocks Gibraltar as Spain Issues Ultimatum
Spain has threatened to sever ties with Gibraltar and close its border with the Rock, if the UK exits Europe, a senior Spanish official has warned.
"We do not see Britain leaving the European Union has an opportunity but you have to understand that if Brexit happened it would change our obligations to Gibraltar," a source told London newspaper The Times.
British MPs have been warned that the UK must factor Gibraltar in the event of a Brexit from the European Union. Gibraltar's government recently sent a six-page document to the chairman of the UK's Foreign Affairs Committee outlining its concerns about the impact a Brexit would have on the Rock.
"In the event of a vote to leave the European Union, it is imperative that the United Kingdom's negotiation of a new relationship with the EU, from outside it, takes into account the views of the Government of Gibraltar," the briefing paper states.
Gibraltar wants the UK and Gibraltar to remain in the EU amid concerns that Spain could exploit the situation and forgo its obligations to the peninsula. The Rock needs Spain for access overland to Europe where around 10,000 people cross the border every day for work.
Gibraltar has been part of Britain's territory since 1713 — but Spain considers the Rock to be Spanish territory and wants it back and territorial tensions have escalated in the past few years.
In 2013, Spain complained about an artificial reef laid around the Rock by the British colony, claiming it would damage the country's fishing industry. Madrid retaliated by imposing border checks on every traveler in and out of Gibraltar causing debilitating delays on roads. Britain's response was to send a Royal Navy ship, HMS Westminster to dock in Gibraltar.
Prime Minister David Cameron said the border checks were politically motivated and said that it violated the European Union's principle of free movement. A principle Cameron has since been keen to distance the UK from during Britain's renegotiation of its membership with the EU. However the European Commission ruled that the border controls were lawful.
According to the Spanish source who spoke to the Times, a Brexit would mean: "No longer would we have to respect the free movement of labor not having long queues and the free movement of capital and goods which Brussels demands.
"We could even close the border if we wanted."
In the recent briefing notes sent to MPs by the Gibraltar government, includes the concern that if Gibraltar was not in the EU, "Spain would be significantly more reluctant to cooperate with its authorities."
Thunderhawk: AS PAPPA J WOULD SAY "HERE'S THE KICKER"
Blessings ThunderHawk Over and Out Goodnight
US, China ‘Actively Explore’ Expanding Trade, Military Ties - President Xi
The United States and China plan to actively examine the possibilities of expanding trade, cybersecurity, counterterror and military-to-military cooperation, Chinese President Xi Jinping said during a meeting with President Obama in Washington, DC on Thursday.
The meeting between Xi and Obama took place on the sidelines of the fourth Nuclear Security Summit in Washington, DC, which is attended by more than 50 foreign leaders.
"We will also actively explore possibilities of deepening cooperation in wide areas, from economy and trade, to mil[itary]-to-mil[itary] ties and people-to-people exchange, from counterterrorism to law enforcement and cybersecurity," Xi stated.
The Chinese president noted that he and Obama also seek to "enhance communication and coordination" on the North Korean nuclear issue in addition to other regional and global issues in order to "consolidate and expand our shared interests."
World Economy Must Be Ready for ‘Catastrophic Consequences’ of Cyberattacks
The international community should ensure there are measures in place allowing to cope with a major cyber attack, which could be disruptive for the global economy, US Deputy Secretary of the Treasury Sarah Bloom Raskin said on Thursday.
The Treasury deputy secretary made the statement at the Cybersecurity Docket’s Incident Response Forum in Washington, DC.
"So far, the global economy and our financial infrastructure have been spared a cyber attack with far-reaching consequences to our financial system and our nation’s economy," Raskin stated. "We need to prepare for cyber incidents that have such potential impact."
Raskin argued that the global economy has been able to avoid a major catastrophe that could freeze “our financial system, our payment system, or our basic functioning of this critical infrastructure" because of extraordinary preparation and measures that are already in place.
The deputy secretary added that the keys to effective response to a cyber attack are similar to the measures that can be implemented in response to a natural disaster.
"The keys are preparation, coordination, and practice," Raskin explained.
US agencies as well as private organizations have suffered numerous data breaches in the past ten years. Targets successfully penetrated include the US Internal Revenue Service, a nuclear research laboratory and the US office of Personnel Management, where personal data of 21 million former and current US government employees was compromised.
BACKDOC: WITH TPP AND OTHER EMPIRE TRADE DEALS ALREADY IN PLAY ITS EASY TO SEE THAT THINGS HAVEN'T BEEN AS SMOOTH AS BUTTER FOR CHINA!
LIKE I'VE BEEN TEACHING FOR WELL OVER A YEAR NOW, CHINA WILL BE MARGINALIZED. WELL, LETS KEEP THEM AWAY FROM THE BUTTER AND HAND THEM THE MARGARINE! HEE HEE
OZ WILL REDIRECT THE BALANCE OF CURRENCY VELOCITY AS WE HEAD IN TO THE NEW REALITY. THE DAYS OF CHEATING ON THEIR CURRENCY WILL BE NO MORE.
LET ME CHANGE THE DIRECTION OF OUR STUDY FOR A MOMENT CAN I?
THANKS. I HAVE THREE POSSIBILITIES OF ACCIDENTS ON PURPOSE.
2. A SAUDI DE-PEG
3. A CYBER ATTACK THAT COULD SEIZE UP ALL DIGITAL CURRENCY
TRANSACTIONS, DEBIT AND CREDIT! IF THIS WERE TO BE DONE IT COULD BE DONE BY ANYONE AND BLAMED ON ANYONE, COULDN'T IT?
BOY WOULD THAT EVER BE A GOOD EXCUSE FOR THE DOLLAR AND MARKET CRASH!
WE HAVE BEEN HEARING OF THIS KIND OF WARNING FOR SOME TIME NOW AND I PERSONALLY BELIEVE IT WILL BE DONE FOR A PURPOSE!
WE WILL SEE! BE PREPARED!
AFTER THE RATE ROLLS FOR THE DINAR,DONG, ZIM,RIAL,RUPIAH, DOLLARS WILL BE DISCARDED QUICKLY LIKE AN OLD TUBE OF TOOTH PASTE AS THESE COUNTRIES DE-DOLLARIZE AS WELL AS SETTLE OIL SALES IN NON DOLLAR CURRENCIES!
BE CAREFUL BECAUSE WE WON'T GET ANOTHER SQUEEZE ONE DAY IF I'M RIGHT.
IT WILL JUST HAPPEN! MMMM AN ACCIDENT! MMMMM DOC IMHO
Thunderhawk: I saved the Best for Last
And NOW for your Cherry on the top.
Just a little bed time story so you can go night night....
As DOC would say here's your Baa Baa
From Hawk to the Family ONCE UPON A TIME
Vietnam Central Bank terminates short-term borrowing of foreign currencies
After March 31 certain enterprises will be not permitted to borrow foreign currencies from banks and then exchange it into VND to buy materials, according to Circular No. 24 from the State Bank of Vietnam (SBV).
The move is a further step from the central bank in its anti-dollarization efforts.
The Circular applies to enterprises that have demand for short-term capital to conduct export-related business activities.
There are still some enterprises allowed to borrow foreign currencies if their demand includes short-term borrowing to make export payments, short-term borrowing for the export or import of petrol; and borrowings for investing abroad.
Mr. Nguyen Hoang Minh, Deputy Director of the SBV’s Ho Chi Minh City Branch, was quoted as saying that the central bank previously allowed enterprises to borrow foreign currencies in order to increase credit growth in the context that VND interest rates were high. Now, though, the monetary situation is more stable and VND interest rates have come down.
BACKDOC: LET THE DE-DOLLARIZATION BEGIN!