14 thoughts on “Renminbi is Already A De Facto Reserve Currency”
nylpas September 14, 2014 at 3:47 am Thanks a lot JC. Question:
Will Gold play the core role for the revaluation of the very countries weight in the SDR basket, and if doing so, can we expect a real and independent audit of the claimed Gold reserves of each member?
Any thoughts concerning timeline for physical Gold to disconnect from “paper” Gold in this context? (And related to this, a possible disconnection of the potential remonetized Gold to the – at present time – in parallel suppressed Silver?) Or will the paper metal fraud just go on forever …
JC Collins: September 14, 2014 at 11:23 am Gold will play a role but not on the level that many think it will. A gold audit is likely at some point and in all probability has already been completed. Just because we haven’t been told about it doesn’t mean it hasn’t happened. Physical gold and paper gold could very well stay tethered. If the system shifts like I suspect it will there will be no mass movement into gold and silver.
b.klausen: September 14, 2014 at 7:11 am indeed it seems the year is far from over.
JC, have you seen this interview with Harvey Organ? Ignore the price speculation, which is what everyone focuses on, but pay more attention to his reasoning for speculating a price revalue.
Organ adds, “It will be a failure to deliver, and a failure to deliver is the same as a default. China is going to demand what they want.” Is all the war talk in the South China Sea and in the Ukraine crisis and ISIS in the Middle East a way to cover over a financial calamity? Organ says, “That’s exactly why you are seeing this. You got it. That’s exactly what’s happening. It’s a physical default, and China is not going to sit idly by. It will want its silver back or it will say I will tell the world, or it will flood the world with its $3 trillion U.S. dollars. . . . The whole thing is going to happen all at once. You are going to see it.”
According to Organ, we are going to see this all unfold before December, that we will see a default by the US and China will set the new price for gold.
JC Collins: September 14, 2014 at 11:13 am Thanks for the link. My analysis leads me to different conclusions. Though I do believe gold will have a different price in the coming months, likely lower.
Roger Parness: September 14, 2014 at 3:57 pm Auric party pooper.
Codizil: September 14, 2014 at 12:57 pm Which price of gold? Paper or physical?
Because paper could go to zero and at the same time physical could go to 10000+
No basket of currencies can represent the anchor of a new monetary system, because they all are credit and credit is just a promise.
There HAS to be a physical anchor otherwise these currencies will devalue against each other, like promises against settlement.
IMO gold will be demonetized, revalued gramatically higher and made an asset like a fine bottle of wine. They will let the SDR’s float against this asset and use gold only to defend their own currency and balance their sheets.in times of hardness.
Triffins dilemma solved. And it also elegantly solves the other huge dilemma:
When a single medium is used as both store of value and medium of exchange, which leads to a conflict between debtors and savers. The only question is: are they this smart? For an answer look at the balance sheet of the ECB, line 1! Gold as an asset!
chuc1997: September 14, 2014 at 3:37 pm Paper collapses, physical skyrockets but physical cannot be acquired with USD under Organ’s scenario.
Organ phrases it as China saying “We will buy all western gold you want to sell – $5,000 bid, nothing offered.”
IMF then says US has defaulted, as a result US SDR share is cut, China’s is raised…given that USD backs all other currencies, this amounts to the global restructuring in SDR’s that JC has been calling for.
SDR restructuring gives global economy the base to grow after clearing the debts. The gold portion compensates USD holders for their already-experienced loss in purchasing power in commodity terms since 2004.
Roger Parness: September 14, 2014 at 3:13 pm So really it’s good news for holders of dollars ie. Americans. A reality check for apocalyptians. No hyperinflation; no sudden collapse. Dinar speculators, Gold to the moon dreamers and survivalists in general will be disappointed.
Stability in international economics has to be a good thing. Continued theft by usury and war mongering for resource control are the dark side of the SDR coin.
chuc1997: September 14, 2014 at 5:40 pm Hyperinflation only in gold and oil terms. It was $250/oz and $15/bbl only 12 years ago.
Cramley: September 14, 2014 at 5:44 pm What is a good source relating to the mechanics of the substitution account?
From what I’ve gathered it seems that as parties unload dollars into the SDR account over successive rounds that the SDR has to compensate somehow for the progressive USD devaluation. How can this be accomplished with a falling gold price and tame SDR interest rates?
It seems the crux of the matter is that if the SDR interest rate in real terms is negative then the price of gold in SDR has to go up to compensate.
Gustavsaure: September 15, 2014 at 4:09 pm Interesting. So are you saying that in order for the SDRM to effectively suck the required inflation out of the western economies, the interest rate on this paper has to be higher than the sovereign paper? And if the USD is correspondingly devaluing, US rates may be rising to control it.
So if there isn’t a perfectly calibrated flow of inflation from the indebted western economies to the SDRM, there will be (significant) leakage into commodities. Do you agree?
daniel grig (@gelingrig): September 14, 2014 at 10:09 pm Hello Very illuminating the article.
We must not forget that the oror is the wealth accumulated by the elite.
Gold makes us a cognitive blindness and we don’t see that this used to restart the monetary system.
Put another way: the gold is the bait of credibility which the elite deceives us, promising a new system based on something real, until they receive our vote, then the gold is removed and remains as a substitute for the FIAT money money debt, money slavery.
Now in this traffic of a reserve to another, we see that gold plays a role of deceiving the Chinese.
Gold that moved to China in recent years, is not China, it is not a ruiqueza of the people, it is only in the name of China but gold controlled by BIS, through the Central Bank of China, is controlled by the globalist elite.
Gold has always played the role of something noble, with real value, offering confidence, so private banking lie will be believable.
Gold is not our friend, is our false light, false hope, that we tied with strings of promises, in our prison financial for not being able to go out to the courtyard of the carcer and see the true light.
Gold is a way to deceive and centralization and the restructuring of the debt through the DEG, is another lie to that system follow funccionando with a few tweaks of facade.
A global monetary equilibrium promise us to this so-called new system more fair and without much risk of speculating in currency on the open market, but is blown in gold, mixed with the same poison FIAT cake. The snake changes the skin.
Jose Johnson: September 15, 2014 at 4:08 am Hello JC, Once again mind-blowing.
What percentage of ones income should be put in physical gold at this point with what is transpiring? What percentage should an American for example have in dollars (cash)?
I have been saving money in cash and gold for a while now, with the 401k to get a tax break and the rest of the money spent trying to pay my off mortgage as it is the only personal debt I have.
Truthfully, I wanted to pay off my mortgage in 5 years – started last year because I felt something big was on the horizon and I wanted to be debt-free from a personal standpoint excluding what the US debt clock says I owe as a US citizen.