THOUGHTS & COMMENTS ON “THE COMING WESTERN TRIBUNALS”
JC Collins Update: The recent announcement by the Obama administration in regards to the AIIB does not mean America is suddenly joining that institution.
It would still require congressional approval, and considering the US Congress has refused to pass the 2010 IMF Reforms, which the Obama administration also supports, strongly suggests that any AIIB membership will also be refused.
The Obama administration, as represented by US Treasury Secretary Jack Lew, last week called on congress again to pass the IMF reform package as America was losing influence in the world.
This reluctance by Congress is what was implied in the post below about America not being admitted into the AIIB, no matter what Obama wants.
Michael Glenn MARCH 22, 2015 AT 7:07 PM What do you think JC ? Will the SDR’s have a gold component or is this just another pure debt play ? Rearranging the deck chairs on a sinking ship that is overloaded with debt is becoming a very tiresome game, don’t you think ~~~
JC Collins MARCH 22, 2015 AT 8:05 PM Agreed. I see gold being used to partially support the currencies in the SDR composition. Much like the relationship between the USD and gold under Bretton Woods. This will bring indirect stability to the SDR without the deflationary pressure of a straight gold standard.
Bullion Baron (@BullionBaron) MARCH 22, 2015 AT 10:49 PM So if the SDR is the new UoA, that makes Gold (or returns Gold to the position of) primary SoV?
JC, do you think that has some significant ramifications for the future price of Gold? The US Treasury market (current SoV) is far larger in size than the current market cap of estimated above ground Gold stock (175,000 tonnes currently priced around US$6.5 trillion).
JC Collins MARCH 22, 2015 AT 11:12 PM What are you referencing as SoV? I’m not clear on the association. Thanks.
Bullion Baron (@BullionBaron) MARCH 23, 2015 AT 12:03 AM Sorry, SoV as in Store of Value. Today the USD acts as the Unit of Account (UoA) while US Treasuries are used as the SoV (i.e. by foreign countries holding surpluses in reserve), where prior to 1971 it would have been Gold.
So if we see a shift to the SDR as UoA and Gold is to return to it’s form as the SoV, then it may need a substantial revaluation higher in order to accommodate the larger amount of capital slushing around today…
JC Collins MARCH 23, 2015 AT 12:19 AM I would expect that the SDR as the unit of account will mean that the domestic currencies themselves will act as the store of value.
Especially if we consider that these currencies are likely to be partially supported by gold. So in a roundabout way, I suppose gold will act as an indirect SoV, much like it did during Bretton Woods.
This is why we are unlikely to see gold added directly to the SDR basket itself. As for the valuation, it could go either way. My initial thoughts would be that gold will probably be devalued further.
It may see some temporary upside during the transition away from the USD system, but as SDR stability and liquidity is established and expanded, gold will likely see some devaluation.
It could also be just as likely that the value of gold is kept constant against the basket currencies, and other metrics allow for market fluctuations in the valuations of the currencies themselves.
What this constant value of gold will be is hard to ascertain. Something worth thinking more about.
I’d be interested in your thoughts on this probability.
Bullion Baron (@BullionBaron) MARCH 23, 2015 AT 1:57 AM I’m not sure if you’re aware of FOFOA (this might be an interesting place to start if you are not familiar: http://fofoa.blogspot.com/2013/10/special-drawing-rights.html but I have been reading his site (and other sources on the Freegold theory) for the last several years along with yours for the past 12+ months.
For a while I viewed the narratives (and expected outcomes) as competing against each other, but have recently come to the view that they may in fact be complimentary (or at least don’t contradict each other).
Freegold essentially sees the functions of money separated, with fiat currencies (or the SDR) working as a UoA and Gold as the SoV. Though for that to occur on a large scale Gold would need a substantial revaluation. FOFOA guesstimated the price required at US$55,000/oz.
I’ve not given too much consideration to the price required, but Gold’s market cap at $6.5 trillion would need to be (at least) several times higher in order to facilitate use as a SoV for countries holding surplus reserves.
I think that using domestic currencies/bonds as the store of value would possibly be quite risky, both for the holder (who wears the risk of significant devaluation in the case the sovereign default/restructure) and the issuer (due to the Triffin paradox).
Domestic currencies would continue being used as a MoE (Medium of Exchange), both at the domestic level and presumably to move into or out of the SDR (or SDRM) and Gold, also continue to act as a UoA for local/domestic purposes. Also they might be used as a short term SoV at the domestic or sovereign level.
I’m inclined to agree with you on Gold’s inclusion in the SDR, I think it’s unlikely Gold would be added to the SDR basket, I can’t think of any benefit that would come from doing so.
JC Collins MARCH 23, 2015 AT 2:26 AM The suggestion that gold would be valued at $55,000/oz is preposterous and extremely unlikely. No offense to anyone, but I simply do not see that happening.
In regards to the Triffin Paradox, it is only relevant when a domestic currency is used as the primary global reserve asset. It will not be a factor if the SDR is used in that role. I agree withthe bulk of the rest of your comment, and think you are right, we are all complimentary to one another.
Susan Morris MARCH 22, 2015 AT 7:24 PM wow! thanks JC. I’m a bit speechless, actually!
Susan Morris MARCH 22, 2015 AT 7:26 PM (collecting thoughts.. So doesx that mean the Money Power is going to throw Netanyahou under the bus?
JC Collins MARCH 22, 2015 AT 8:14 PM Not yet. The current Israeli governance structure will continue to be used for awhile longer. Israel will eventually expand under the mandates of a broader Middle East peace process.
When we consider that economic consolidation is only one part of an expansive consolidation of all things, cultural, as well as religion, we can expect to see religious difference being presented as the dividing factor which is preventing the required level of peace in the region.
Whether its called Israel, or Greater Israel and Palestine, or even New Canaan, the move towards consolidating the worlds religions has already begun.
In fact, it began with the introduction of the New Age Movement decades ago. Current Israeli leadership is somewhat irrelevant, as it is the bigger process which we should be focused on.
Mark Matijevich MARCH 23, 2015 AT 12:26 AM The plans to consolidate the major religions is underway.
“Israel’s former President Shimon Peres asked Pope Francis to head a future “UN of religions”. The article is here:
I think consolidation of religions would be a paradigm shift and a great accomplishment if they get it right.
~GetReal MARCH 22, 2015 AT 8:07 PM JC, You are very confident of this plan… so much so, that I have to wonder are you sitting in a front row seat as the arguments are being made as to how they will proceed? :) It really doesn’t matter if you are or not, it only tells me that my decision to believe and follow your version of how this will play out was good intuition.
Secondly, you mention for those who were late to your blog, we should read the previous year’s information. I have read the Bretton Woods and the SDR’s series and some of the documents that you have linked into many docs. Do you have a must read list of those post that you believe need to be read?
For instance, while I agree that your fav female, Karen Hudes, is disinfo… reading that post was not necessary in the understanding of the changes about to take place.
As always, I appreciate your time and value your work. Thanks for another good read. ~Get Real
JC Collins MARCH 22, 2015 AT 8:19 PM No front seat my friend, but I’m highly tuned into this frequency. Obsessed and compelled might be a better way of saying it.
The transition of economic models and systems only happen every century or so, we are extremely lucky to be alive for this one. In essence, we all have a front row seat.
In regards to the relevant posts, perhaps I should create a new category and link them all.
~GetReal MARCH 22, 2015 AT 8:34 PM JC, Love it! The must read list .. that would be fabulous. ~Get Real
Russelleaton MARCH 22, 2015 AT 8:10 PM You say: “Additional funding for the IMF….will come from…. honoring of vast amounts of sovereign debts in the form of historic bonds”.
Can you very kindly explain why this is so, and in particular where will the money come from to ‘honour’ the historical bonds? Any comments appreciated, and thanks for an excellent article.
JC Collins MARCH 22, 2015 AT 8:27 PM I will not say much more then what I already have. But think of it this way, the exchange of debt is as simple as moving numbers around.
The United States is heavily involved in the process of what is going to happen to their debt which is being held in the foreign reserve accounts around the world.
Many of these historical bonds are held by Americans, or American interests. Countries holding American debt, such as China, could easily honor their sovereign debts, such as bonds, with foreign account reserves, and that liquidity will eventually find its way into the American economy, as well as other economies around the world.
Additionally, sovereign debt can be exchanged for SDR bonds, a liquidity exchange, just like QE. This is a very grey area, so elaborating further is probably pointless.
Tommydelicious MARCH 22, 2015 AT 8:25 PM Nice work JC. The question has been asked many a time, “how could the German people allow Hitler to do the things he’s done?” As an American citizen, I can now relate to what occurred in Germany almost 80 years ago. It’s the old “boiling frog” trick……..it just kept getting a little hotter, a little hotter, only a little hotter.
Alas, balance will return, and let us hope that the rebalancing does not come about in a tragic fashion.
Cramley MARCH 22, 2015 AT 8:25 PM Some interesting links:
Haotian Survey: UK to “surrender” To make full preparations
Zheng Jie: actively and steadily promote the internationalization of RMB
“Master” Golden Qi Secret Silk Road fund: “along the way” is not strictly geographical boundaries
In a way, the role played by Asian investment bank “catfish effect” will promote the reform of existing international institutions
Catfish effect: http://baike.baidu.com/view/40978.htm
Two Chinese exposure across the world the US terror regiment decisive mercy
China’s central bank issued new regulations can do import and export of gold and gold products restrictive approval
Comments may be made at the end of Part 2 Thank You