Thanks My Ladies for letting us share from your private chatroom
PrincessDD: ML when you say that the ban is coming off are you referring to the sanctions?
MY LADIES: NO NO NO NO PRINCESS REMEMBER THE CBI POSTING.... WE SAW WHERE THE TREASURY DEPARTMENT SAID THERE WAS 1 EXCHANGER AND 1 BANK BELONGING TO IRAN THAT WERE NOT ALLOWED TO TRANSACT IN USD...REMEMBER??
WELL THEY BOTH CAME INTO COMPLIANCE NOW.
PrincessDD: Wow another step forward.
Joey: Moving so fast.
MY LADIES: OK SO HERE WE HAVE SOME TALKS BEFORE THE G20 MEETING THIS WEEKEND. THE IMF SEEMS TO BE CONFIDENT THAT THE STRUGGLE WILL BE WORTH IT http://thebricspost.com/imf-cuts-global-growth-outlook-calls-for-accommodative-monetary-policy/#.Vei8xJeHmHY
MVL: My question is, a struggle for what? Life-support for a system that is destined to assume room temperature, or wise nutrition and vitamins for a new system that will dwarf the capabilities of the one it is succeeding?
MY LADIES: NO MVL THESE COUNTRIES ARE STRUGGLING TO MAKE IT. ADJUSTING ONES CURRENCY IS VERY PAINFUL FOR THE ECONOMY.
MAKE NO MISTAKE..WHEN IRAQ COMES OFF THIS PROGRAM RATE AND HAS REAL MONEY WITH REAL VALUE IT WILL TOTALLY SUCK FOR THEM FOR A FEW YEARS.
IT WILL BE PAINFUL, MANAGING THE MARKET ECONOMY IS NO JOKE.
SOME LESS INFORMED FOLKS THINK OH WELL THEY ARE GOING TO GET 2+ OR 3+ DINAR TO THE DOLLAR.
REALLY?? I MEAN REALLY??? THE PEOPLE INSIDE IRAQ ARE NOT GOING TO GET ANY SUCH THING.
THE 2+ AND THE 3+ IS FOR ALL THE FOLKS ON THE OTHER SIDE OF THE BORDER!
MVL: Ah, ok. Got it. Yes, I see your point clearly now. Sadly, for the in-country economics, that will be a unique situation, similar perhaps to what happened to the economies that used to report to The Bear went independent after 1989?
MY LADIES: SO THERE ARE NO COINCIDENCES EVER. HAVE A LOOK AT THIS, AND SEE WHICH OFFICIALS WERE IN ATTENDANCE.
Putin, Xi meet to boost ties, sign raft of agreements http://thebricspost.com/putin-xi-meet-to-boost-ties-sign-raft-of-agreements/#.Vei-FJeHmHY
MVL: Vladimir didn't travel all that way just to see a military parade to honor the anniversary of WWII ending. He could have stayed home, and watched one right in Red Square.
Putin made the trip because some serious rubles are on the table with his Chinese counterparts. He's a trained KGB officer, a master at chess, and knows which side of his black bread gets buttered.
MY LADIES: LOOK AT WHO WAS THERE!
On Thursday, Putin attended China’s Victory Day parade along with UN Secretary General Ban Ki-Moon, Presidents of South Africa, South Korea, Egypt, and Kazakhstan among other world leaders.
PrincessDD: I just read that one. they are moving forward too with the 30 documents
MY LADIES: YES THEY ARE..
MVL: Wow. That's quite a guest list..."among other world leaders"...
MY LADIES: HUMMMM VERY INTERESTING…HAVE A LOOK..
BRICS actively pushing for IMF reforms blocked by US: Lavrov
IMF Chief Christine Lagarde had last year hinted at a “Plan B” if the US failed to endorse the reforms by the end of 2014.
Both the China-led AIIB and the BRICS Bank have been gaining popularity and are seen as a counterbalance to the IMF and World Bank. The US and Japan have not applied for the membership in either of the new development banks.
The IMF reforms will hand more IMF voting powers to BRICS, a long-standing demand of the group and will also reduce the concentration of representative power of Western Europe at the IMF board.
JP: Mary, any speculation on what’s causing the apparent acceleration of the new system? Is it the economic pressure felt around the globe or is it just another part in the plan or a combination of the two? I think it is the desire of many nations who have been held underneath the thumb of the USD to be their own “man” when it comes to economic systems. Once you give people up a taste of freedom economically, I think that’s hard to take back.
MY LADIES: JP I THINK IT'S ALL OF THE ABOVE COMBINED WITH THE FACT THAT THE OLD SYSTEM IS BREAKING APART EVERYDAY..
JP: ML, what is the threat in the event that the old system breaks away and the new system hasn’t taken a hold in all of the countries? Will that not bring about chaotic economic times?
MY LADIES: SO BACK TO THE BALANCE SHEET..IF YOU’RE HEMORRHAGING LOSSES ON ONE SIDE OF THE SHEET, YOU NEED TO BE SURE YOU HAVE MORE COMING IN ON THE OTHER SIDE.
MY LADIES: YA KNOW JP, I JUST REALLY THINK THIS IS CONTROLLED...I DON'T THINK I SEE CHAOS..NO ONE WINS FROM CHAOS.
JP: So in essence it is a teeter totter event with the control being the fulcrum point in the center. That would be the control you were alluding to.
MY LADIES: I THINK SO... AND IT SURE IS SETTING UP THAT WAY ISN'T IT..IT SEEMS SOMETHING GOES DOWN AND SOMETHING COMES UP..
Buddy: Maybe so, but lately there has been more going down.
MY LADIES: MAYBE BUDDY BUT YOU NEED TO BE OUT OF THE OLD BEFORE YOU CAN GET INTO THE NEW……MY LADIES: JUST LIKE CLASSIC CLOSET ROTATION...LOL...
LM: I totally agree Mary! I don’t buy into the doom and gloom scenario… I just hope the end game is in sight… Seems like it MUST be!
MY LADIES: DO WE KNOW WHAT THE G20 SUMMIT IS?
Sager: Is the g20 summit an economic meeting of the top financial minds?
MY LADIES: RIGHT SAGER..
MY LADIES: China prepares to take the wheel at the G20
China’s G20 presidency has been long-awaited. China sees the G20 as the world’s ‘foremost international economic cooperative mechanism’, unique for giving developing countries an equal voice at the table. Now is China’s time to step up to the plate. One thing was clear from G20 meetings in Beijing and Shanghai: there is no shortage of ideas and risks for China’s upcoming presidency. These tend to fall into three categories: growth, governance and leadership.
MVL: Hmm. The Chinese in the wheelhouse of the G20...? That says to me they will be able to sway the agenda perhaps...?
MY LADIES: The Biggest News from Brisbane: China to Chair the G-20 in 2016 http://www.brookings.edu/blogs/up-front/posts/2014/11/14-brisbane-china-g20-bradford
The biggest news at the end of the Brisbane G-20 on Sunday will be to confirm for the first time in an official G-20 communique that China will indeed chair the G-20 Summit in 2016.
PrincessDD: China’s voice in the global opera
As Chinese leader Xi Jinping holds a summit with President Obama and takes command of the G20, he must also define what values China offers as it tries to reshape the international system. http://www.csmonitor.com/Commentary/the-monitors-view/2015/0903/China-s-voice-in-the-global-opera
IQD NOVA: Wow Just Able To Catch Up!! Lots Of Great Info Mary!! Like We Have Been Saying The New System Is Coming Fast!!!
PrincessDD: Turkey says G20 in 2015 to focus on inclusive growth
Turkish Deputy Prime Minister Cevdet Yilmaz has outlined Turkey's objectives during its G20 presidency http://www.turkishweekly.net/2015/09/03/news/turkey-says-g20-in-2015-to-focus-on-inclusive-growth/
MY LADIES: GOOD PRINCESS..AND THAT'S WHAT WE'RE LEARNING INCLUSIVE GROWTH..
MEMPHIS : I saw some good discussion AND some good questions today. With an attempt at brevity (JP's question that follows deserves much more) and an attempt to "leave the auditorium" and sit under a shade tree in the campus square, here is a bit of reply to the thoughts put forward by JP:
" JP: ML, any speculation on what’s causing the apparent acceleration of the new system? Is it the economic pressure felt around the globe or is it just another part in the plan or a combination of the two? I think it is the desire of many nations who have been held underneath the thumb of the USD to be their own man..."
MEMPHIS: Since the financial crisis of '08 emerging markets have taken advantage of cheap $ (low interest rates) in the USD and have added an UNPRECEDENTED $9+T in USD denominated debt to their balance sheet. So in that respect they have been loving the party and feeding at the trough of the UST like there is no tomorrow but guess what? Tomorrow is here.
As long as economies (thinking GLOBALLY here) are expanding (growing) then the added weight of this debt burden is not an issue. No cracks appear as long as the music is playing but that is no longer the case. Has the music stopped? No but it has slowed greatly and is still slowing.
The entire globe is encountering a contraction, a deflation, wherein now suddenly all this debt matters and adding GREATLY to the problem? (this cannot be overstated here) is the strong USD.
If a nation is to remain competitive relative to their neighbors this shakes out (after all the complexities of global interactions are settled) in the value of their $. The old adage that a lower relative currency value favors the domestic economy is true but what about the debt? Does this figure into the grand global equation?
So what are they to do, these poor nations who took all that the US debt machine would hand them?
Break free from the yoke that is binding them? From the debt side of the equation, for nation A's currency to now regain some lost ground, to rise in value relative to the USD (or even just keep pace) is truly money in the bank right? (For the sake of time we will leave out all talk of pegs here)
A rising USD relative to all these emerging currencies does what to their USD debt (thinking domestically now)? It makes it more expensive to repay right? Their own economic engine (let's pick Sri Lanka for example) produces a certain GDP and from this a certain monetary growth for the nation IN THEIR CURRENCY and then this currency goes to pay off a portion of their USD denominated debt but suddenly (actually this has been growing for over a year right?) their $ does not stretch as far due to the rising USD.
Put directly, if a nations money devalues relative to the USD they are then taking a bath at the FOREX desk when they repay and it is killing them. The Sri Lanka Rupee buys less USD today than when borrowed unless it's value is held high. Never borrow against an appreciating currency. This was the failure of many businesses and private parties who borrowed cheaply into the Swiss Franc only to be ruined in early 2015.
So we have competing forces at work here. Does nation A maintain a lower relative currency and reap the near term economic benefits; taking their losses effectively on the back end? Or does it compete against the rising USD and service it's debt at the most favorable exchange possible while allowing things internally to wax worse and worse. This event is far from over and will be something to watch for sure.
This is the stage of the cycle which we are now in and when complete history tells us that these debts will largely be cleared, wiped away, defaulted on. All this fast and easy money creation thru debt will be erased and equilibrium will be regained in the business cycle.
This is by the way a small glimpse into the big GCR that has been preached from most corners of the dinar world.
It was crap three years ago when I began attempting to point to it and now that it is unfolding we are beginning to see evidence that yes, the debt does matter and it is a much deeper discussion than simply re-pricing the world into higher valuations.
Pulling this together, the rising USD and global deflation (in every possible arena) is slowly destroying these nations and they are very much so fighting for their life in an every man for himself struggle.
When JP proposed the problem as "economic pressure felt around the globe" he fully nailed it.
The globe is facing a deflationary TREND (as in: this is not over) that is yielding ever deflating GDP's yielding less $ to repay the USD denominated debt. And adding injury to pain, a USD that is yet to rise even higher.
How can we be sure the dollar is not about to crash and burn?
Capital flows (medium and likely even long term) are going to continue INTO the USD as it is the only what? The only game in town wherein big money can go. Money cannot go into a hole and as Armstrong might say here, China is not yet ready for prime time. Even the American economy CANNOT hold all of the capital that is headed our way. Enter the SDR?
In closing, one final important point (as we rest under this big oak) is found in John's opening words ( not beating up on you here sir) and they were:
"ML, any speculation on what’s causing..."
We have the ability to see the world with clarity, the information is right there if we but reach out, grab it, and properly interpret. I see the leaders here and other "lay people" (if that's the right term!) doing a good job of this daily. It is NOT stuff for the faint of heart!
Beyond having clarity (which begets confidence) we have to recognize that speculating certainly has it's place (and is by no means a four letter word) but we should not sell ourselves short and think that confidence cannot be had because it can! We just need to clearly define where we have it (where we are right) and where we are venturing beyond (into what if's) as I tried to express in yesterday's post.
Ok, hope this all made sense guys, it is a challenge for me to attempt as these things are not light discussions and maybe others can correct if needed or elaborate and express certain points in a better fashion!