READER THOUGHTS ON “ONE HUNDRED PERCENT OF NOTHING” Part 2
Matt McBride (@MattMhmmcbride) JANUARY 29, 2015 AT 11:01 PM Great post Cooper. I especially like the videos :)
Never having lived through a reserve currency change (like anyone under the age of 100), I am struggling to grasp the full range of psychological effects that a serious system change would have on the untrained and asleep masses.
The current elite who are orchestrating the system change would not have lived through the last system change (Pound to Dollar) either, so would be relying on history, theory, models and guess work.
Sitting down on the weekend and talking to my 94 year old grandmother about the great depression, great Australian drought, and world war two I realised how unprepared the baby boomers and gen X & Y are for hard times. Generally, since the mid 70’s we have only know good times fuelled by debt and buy now, pay later.
Matt Continues: I try to imagine the fear of people waking up one day only to find the status quo of the US being the centre of the universe has changed.
The fall out and shock wave in the US and around the world could be difficult for the PTB to control.
When status quo is suddenly disrupted, the suppressed competitors of the existing system spot an opportunity to strike. This in itself, can cause people to do stupid things.
The Elites (in the know) have always profited from the chaos of crashes, however, the complexity of mass psychology makes the results never exactly the same.
The crashes of 1989, 1998, 2000, 2008 were not system resets but merely bumps along the same road.
The world is about to be turned upside down, and the PTB are trying to micromanage it in order to ensure its success.
Kicking the can till December 2015 may seem like weakness, but in the scheme of a once a century system reset, a few months is insignificant.
This general plan JC has identified continues to play out.
The system will be reset in 2015 and a new status quo will emerge from 2016.
Cooper (@coopersmith648) JANUARY 30, 2015 AT 5:30 AM Great points Matt. I totally agree with you on 2015. Really looking forward to sharing this experience with all the peeps in attendance at http://www.philosophyofmetrics.com!
Daneackerman JANUARY 29, 2015 AT 3:25 PM Hey guys and gals. I found a pretty neat webpage in the Council on Foreign Relations website. Its probably from a US perspective but there are some interesting articles in there. They call them “Backgrounders.”
Here is one in particular that was pretty interesting and may speak of some additional reasons that China needs to delay the 2010 IMF reforms.
Cooper (@coopersmith648) JANUARY 29, 2015 AT 6:04 PM thanks for the links dane, that second one held my interest.
For anyone that finds it helpful, a really good ‘google’ search tip is the use of the word site: and the use of ” “ to group words as a single string for search queries. Some examples:
site:cfr.org “paris club”
site:cfr.org “imf reforms” “2010”
site:cfr.org “renminbi” “internationalization”
site:imf.org “urbanization” filetype:pdf
site:worldbank.org “exchange rates” filetype:pdf
daneackerman JANUARY 29, 2015 AT 6:23 PM Very cool Cooper thanks a million:)
Steve Henningsen (@Stevephenni) JANUARY 29, 2015 AT 4:21 PM Breadcrumb alert…http://www.dailyrapid.com/2015/01/bill-gates-calls-global-government/
Yes, things would be so much easier with one group calling the shots…
Daneackerman JANUARY 29, 2015 AT 4:39 PM Sorry for bombarding the blog but I’m on a reading frenzy today. Found more stuff in the CFR website. Here is a pretty good article on the G7, G8 and G20 development. http://www.cfr.org/international-organizations-and-alliances/group-seven-g7/p32957
Which lead to another article on the G-Zero state of the world. They are old articles but interesting reads if your up to it.
Cooper (@coopersmith648) JANUARY 29, 2015 AT 6:24 PM I reckon it’s great to see so much enthusiasm here in this space. [said in appreciation of your bombardment]
Daneackerman JANUARY 29, 2015 AT 5:28 PM Man JC crossing my fingers for the Keystone XL to finally be a done deal today. Here are a few perspectives on it:
toknowyourenemy JANUARY 29, 2015 AT 9:58 PM So it goes to his desk. He signs it for the code of reforms….otherwise? So he signs it, makes the deal and its on only hasn’t the US lost its power of veto for delaying? In a progressives eyes, just moving the ball forward, right?
Cooper (@coopersmith648) JANUARY 30, 2015 AT 5:21 AM
@ 19:05 Ann Pettifor is asked if a European Soverign Debt Restructuring Regime would emerge as a response to a Sovereign Debt default by Greece.
She responds by saying it’s unlikely, with no vision for such a mechanism currently present – citing that the IMF’s SDRM proposal for restructuring Argentina’s Sovereign Debt crisis in 2001 was essentially vetoed by Wall Street and shelved.
On the IMF’s website dated April 10, 2014 Christine Lagarde states, “Now, I want to dismiss the idea that we would be heading in the direction of … the SDRM”.
Also, Christine has stated recently, “In terms of debt conference, the IMF a few years back had tried to set up something called the SDRM (Sovereign Debt Restructuring Mechanism)… that has not really been crowned with great success.” JC Collins also identifies that the SDRM failed along with why and what to expect.
The IMF advocates the issuance of CACs, which JC points out are Collective Action Clauses, for the Restructuring of Commercial Bond Debt.
Note that since June 2013, standardized and identical CACs have been included for all new Euro area government bonds.
I don’t pretend to truly grasp this, but… could it be that the CACs might not be considered adequate for dealing with Sovereign Debt defaults given Argentina’s outcome recently,
and if they are indeed inadequate, then without the IMF actively pursuing SDRMs doesn’t that really just make the Fund, as the principle Sovereign Debt Restructuring Mechanism, irrelevant?
Even bringing the world right to the brink of a historical maelstrom marked by prolonged economic crisis because we are just out of time and proper measures aren’t in place to support the ratification of the 2010 IMF Reforms. Notwithstanding the coordinated solutions of the Paris and London Clubs.
While researching the Argentine Debt Trial of the Century where interpretation of the “pari passu clause” saw the U.S. courts rule against Argentina and in favour of these so-called “vulture funds”, it came to my attention that the United Nations is working on a “Debt Workout Mechanism“.
J.C. is this DWM proposed by the United Nations going to be what the IMF’s SDRM was supposed to be – before being vetoed into the dustbin by various actors?
[Thanks for any response on this question. I’m sorry for such a long post mate, I thought the extra information might interest some readers].
Perhaps something to pencil onto our calendars is:
“12 January 15 – The first working session of the General Assembly ad hoc committee on sovereign debt restructuring processes will take place on 3-5 February 2015 in New York.”
This is where it looks like J.C. has nailed it with regards to his SDR roadmap:
[A/RES/69/247] A/69/PV.77 29 December 2014 GA/11608 120-15-35 – A/69/466/Add.3 DR II – Modalities for the implementation of resolution 68/304, entitled “Towards the establishment of a multilateral legal framework for sovereign debt restructuring processes”
Moving onto a report on External debt sustainability and development (document A/69/466/Add.3), recommended by its Second Committee (Economic and Financial), the Assembly took up a draft resolution contained therein on modalities for the implementation of resolution 68/304, titled “Towards the establishment of a multilateral legal framework for sovereign debt restructuring processes”.
Macroeconomic policy questions: external debt sustainability and development
“Towards the establishment of a multilateral legal framework for sovereign debt restructuring processes”
The General Assembly,
Decides to establish an ad hoc committee, open to the participation of all Member States and observers of the United Nations, to elaborate through a process of intergovernmental negotiations,
as a matter of priority during its sixty-ninth session, a multilateral legal framework for sovereign debt restructuring processes with a view, inter alia, to increasing the efficiency, stability and predictability of the international financial system and achieving sustained, inclusive and equitable economic growth and sustainable development, in accordance with national circumstances and priorities;
Cooper (@coopersmith648) JANUARY 30, 2015 AT 7:53 AM haha what a classic!
U.N. to negotiate legal framework for sovereign debt restructuring 9 September 2014
“…The peoples of the world have spoken and we have decided that the time has come to embark on an ethical, political and legal path together that can put an end to this unbridled speculation,” Argentine Foreign Minister Hector Timerman told the U.N. General Assembly after the vote.
“The time has come to give a legal framework to the financial system for restructuring sovereign debt that respects the majority of creditors and which allows countries to come out of crises in a sustainable manner,” he said…
Historic UN General Assembly vote on a multilateral sovereign debt mechanism 19 September 2014
“…On 9 September, the United Nations General Assembly adopted by vote the crucial draft resolution of the Group of 77 and China, “A/68/L.57/Rev2: Towards the establishment of a multilateral legal framework for sovereign debt restructuring processes.”
A majority of 124 countries voted for the resolution, 11 countries voted against it, while 41 countries abstained from a vote. A total of 176 countries out of the UN membership of 193 were present.
The central action of the draft resolution is to “Decide to elaborate andadopt through a process of intergovernmental negotiations, as a matter of priority during its 69th Session, a multilateral legal framework for the sovereign debt restructuring processes with a view to, inter alia,
increasing efficiency, stability and predictability of the international financial system as well as achieving sustained, inclusive and equitable economic growth and sustainable development, in accordance with national circumstances and priorities.”
The adoption of this resolution is historic…”
JC COLLINS NAILED IT! ‘They’ have the necessary framework. Now, can they pull all this together… interesting times :)
Daneackerman JANUARY 30, 2015 AT 2:22 PM I was watching this January 15 presentation from Christine Lagarde to the Council on Foreign Relations http://www.cfr.org/economics/christine-lagarde-new-multilateralism-face-strong-headwinds-global-economy/p35940
Its a pretty good listen but at 49 minutes 25 seconds of the video a woman from the audience asks an interesting question and the answer is even more interesting.
Christine Lagarde spoke of the question waking up the “sleepy competition lawyer” in her and of breaking up cartels because they shouldn’t exist. Perhaps shes saying that its time to get rid of old competitive ways and that cartels have broken up from market forces in the past so maybe its time to start applying market forces to the oil industry? Are the market forces what we are seeing unfold in oil now? Am I far off here or on a plausible trail?
In her presentation she pretty much says the US has time to pass the 2010 reforms and that they will work on alternatives to proceed anyway but will not find a solution. So it seems that the original agreement is still valid and on the table for being a reality.
deejj87 JANUARY 30, 2015 AT 9:11 PM JC is right on point!
“Gulf Arab oil states may need to rethink longstanding economic policies, including their fixed exchange rates, over the next couple of years as economic cycles in the region and the United States diverge. The deflationary trend will impact the region as hard-times emerge and the economies decline into 2020.
The six nations in the Gulf Cooperation Council (GCC) have pegged their currencies to the dollar. What was once viewed as a stabilization mechanism will turn against them and import deflation as oil prices collapse.
True, in recent years the GCC economies have moved more out of sync with the United States. However, the pegs are now pressing the GCC policymakers to mirror the U.S. central bank’s decisions even though this is contrary to domestic policy objectives.
As long as they have currency pegs to the dollar, the Gulf States could face destabilizing capital outflows/inflows if they allow large interest rate gaps to open up with the United States.
There remains a risk that the US will be forced to raise rates to fight a rise in the stock market as capital inflows pour in from many regions. We are likely to witness extreme currency destabilization in the years ahead.”